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CFA Level2 Vocab

Subjects : certifications, cfa
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. A measure of th e yield on the undel~ ing bond of a futures contract implied by pricing it as though the underlying will be delivered at the futures expiration.






2. The present discounted value of future cash flows: For assets - the present dis-counted value of the future net cash inflows that the asset is expected to generate; for liabilities - the present discounted value of the future net cash outflows that a






3. An activity ratio equal to the number of days in the period divided by inventory turnover over the period.






4. With respect to financial statement analy-sis - the ability of a company to fulfill its long-term obligations.






5. An obligation that is expected to be settled - with the outflow of resources embody-ing economic benefits - over a future period gen-erally greater than one year.






6. An account that offsets another account.






7. The operational flexibility to adjust prices when demand varies from forecast. For example - when demand exceeds capacity - the company could benefit from the excess demand by increasing prices.






8. Common-size analysis thatinvolves comparing a specific financial statementwith that statement in prior or future time peri-ods; also - cross-sectional analysis of one companywith another.






9. The quantity of real CDP pro-duced by an hour of labor.






10. A condition in the futures markets in which the benefits of holding an asset exceed the costs - leaving the futures price less than the spot price.






11. A calculation of yield that is annualized using the ratio of 365 to the number of days to maturity. Bond equivalent yield allows for the restatement and comparison of securities with different compounding periods.






12. The analyst'S estimate of a stock's value at a particular point in the future .






13. Resolving differences in indications of value when estimating market value.






14. A possible value of a random variable.






15. The fixed price at which an option holder can buy or sell the underlying.






16. The sum of the real risk-free interest rate and the inflation premium.






17. A random variable for which the range of possible outcomes is the real line (all real numbers between (-00 and +(0) or some subset of the real line.






18. The risk of a change in value of a n asset or liability denomi-nated in a foreign currency due to a change in exchange rates.






19. A contract in which the under-lying asset is oil - a precious metal - or some other commodity.






20. The discount possibly applied by the market to the stock of a company operating in multiple - unrelated businesses.






21. Promises by the company to pay benefits in the future - other than pension benefits - such as life insurance premiums and all or part of health care insurance for its retirees.






22. Above average or abnormally high growth rate in earnings per share.






23. A business's value under a going-concern assumption.






24. A variable used to explain the dependen t variable in a regression ; a right-hand-side variable in a regression equation .






25. A swap in which the floating payments have an upper limit.






26. A strategic corporate goal repre-senting the long-term proportion of earnings that the company intends to distribute to shareholders as dividends.






27. An agreement between two parties to exchange a series of future cash flows.






28. A method for accounting for the effect of options (and warrants) on earnings per share (EPS) that specifies what EPS would have been if the options and warrants had been exercised and the company had used the pro-ceeds to repurchase common stock.






29. The correlation of a time series with its own past values.






30. With reference to the presen-tation of expenses in an income statement - the grouping together of expenses serving the same function - e.g. - all items that are costs of good sold.






31. The intercept and slope coefficient(s) of a regression.






32. A procedure for determining the interest on a loan or bond in which the interest is deducted from the face value in advance.






33. A function that specifies the probability that the random variable takes on a specific value.






34. A procedure of selecting every kth member until reaching a sample of the desired size. The sample that results from this procedure should be approximately random.






35. An entity (partnership - corporation - or other legal form) where control is shared by two or more entities called venturers.






36. Investments in which investors exert significant influence - but not con-trol - over the investee. Typically - the investor has 20 to 50 % ownership in the investee.






37. A contract calling for the purchase of an individual stock - a stock portfolio - or a stock index at a later date at an agreed-upon price.






38. The currency of the country where a company is located.






39. The residuals from a fitted time-series model within the sample period used to fit the model.






40. An option in which the underlying is a bond; primarily traded in over-the-counter markets.






41. A regression that expresses the dependen t and independent vari-ables as natural logarithms.






42. The rate demanded by purchasers of bonds - given the risks associated with future cash payment obligations of the particular bond issue.






43. A valuation ratio calculated as price per share divided by book value per share.






44. Hirschman Index A measure of rna ket concentration that is calculated by summing the squared mar et shares for competing companies in an industry; high HHI readings or mergers that would result in large HHI increases are more likely to result in regu






45. A form of centralized risk management that typically encompasses the man-agement of a broad variety of risks - ind uding insuran -ce risk.






46. A basis for reporting investment income in which the investing entity recognizes a share of income as earned rather than as divi-dends when received. These transactions are typi-cally reflected in Investments in Associates or Equity Method Investment






47. Ratios that measure how efficiently a company performs day-to-day tasks - such as the collection of receivables and management of inventory.






48. Segment liabilities divided by segment assets.






49. An act passed by the U.S. Con-gress in 1933 that specifies the financial and other significant information that investors must receive when securities are sold - prohibits misrepresenta-tions - and requires initial registration of all public issuance






50. A continuous - symmetric prob-ability distribution that is completely described by its mean and its variance.