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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. The prooability of an observation - given a par ticular set of conditions.






2. A comparison of revenues with working capital to produce a measure that shows how efficiently working capital is employed.






3. The margin requirement on any day other than the first day of a transaction.






4. Unearned fees are recognized when a company receives cash payment for fees prior to earning them.






5. A form of data min-ing that applies information developed by previ-ous researchers using a dataset to guide curren t research using the same or a related dataset.






6. A reserve created against deferred tax assets - based on the likelihood of realizing the deferred tax assets in future account-ing periods.






7. Reward-to-volatility ratio; ratio of portfolio excess return to standard deviation.

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8. 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.






9. A means of settling payments in which the amount owed by the first party to the second is netted with the amount owed by the sec-ond party to the first; only the net difference is paid.






10. The relationship amongputs - calls - and forward contracts.






11. Agreements made by a company in bankruptcy under which a company's capital struc-ture is altered and/ or alternative arrangements are made for debt repayment; U.S. Chapter II bankruptcy. The company emerges from bank-ruptcyas a going concern.






12. An approach to portfolio analysis using expected means - variances - and covariances of asset returns.






13. Under U.S. GAAP - a measure used in estimating a defined-benefit pen-sion plan's liabilities - defined as 'the actuarial present value as of a date of all benefits attributed by the pension benefit formula to employee ser-vice rendered prior to that






14. The probability of a Type I error in testing a hypothesis.






15. In accounting - a liability of uncertain tim-ing or amount.






16. The present value of an investment's cash inflows (benefits) minus the present value of its cash outflows (costs).






17. An electronic payment system used widely in Europe and Japan.






18. A varia-tion ofVAR that reflects credit risk.






19. A procedure used primarily in futures markets in which the parties to a contract settle the amount owed daily. Also known as the daily settlement.






20. With reference to regression - the set of variables included in the regression and the regression equation's functional form.






21. The variable whose variationabout its mean is to be explained by the regres-sion; the left-hand-side variable in a regressionequation.






22. The date that a shareholderlisted on the corporation's books will be deemedto have ownership of the shares for purposes ofreceiving an upcoming dividend; two businessdays after the ex-dividend date.






23. A method for estimating a company's before-tax cost of debt based upon the yield on comparably rated bonds for maturities that closely match that of the company's existing debt.






24. The earnings growth rate in a company's mature phase; an earnings growth rate that can be sustained long term.






25. When liabilities translated at the current exchange rate are greater than assets translated at the current exchange rate. Liabilities exposed to translation gains or losses exceed the exposed assets.






26. The pro-portion of the ownership of a subsidiary not held by the parent (controlling) company.






27. In statistics - a desirable property of esti-mators; an efficient estimator is the unbiased esti-mator with the smallest variance among unbiased estimators of the same parameter.






28. A tool that calculates the contri-bution to real CDP growth of each of its sources.






29. The analysis of portfolio performance in terms of the contribu-tions from various sources of risk.






30. Analysis that shows the changes in key financial quantities that result from given (economic) events - such as the loss of customers - the loss of a supply source - or a catastrophic event; a risk management technique involving examina-tion of the pe






31. The single-period interest rate for a completely risk-free security if no infla-tion were expected.






32. A contract that spans a number of accounting periods.






33. The yield to maturity on a basis that ignores compounding.






34. A transaction whereby the target company management team converts the target to a privately held company by using heavy borrowing to finance the purchase of the target company's outstanding shares.






35. The differ-ence between reported net income on an accrual basis and the cash flows from operating and investing activities compared to the average net operating assets over the period.






36. Provision for a return of invest-ment - net of value appreciation.






37. A forward contract to enter into a swap.






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






39. With the accounting systems - a formal record of increases and decreases in a specific asset - liability - component of owners' equity - rev-enue - or expense.






40. A measure of financial lever-age calculated as average total assets divided by average total equity.






41. Revenue after adjustments (e.g. - for estimated returns or for amounts unlikely to be collected).






42. The risk associated with changes in the relative attractiveness of products and services offered for sale - arising out of the competitive effects of changes in exchange rates.






43. A loss in value caused bychanges in price levels. Monetary assets experi-ence purchasing power losses during periods ofinflation.






44. Offering two or more products for sale as a set.






45. A probability drawing on per-sonal or subjective judgment.






46. The rate of return that suppliers ofcapital require as compensation for their contri-bution of capital.






47. The graph of the capital asset pricing model.






48. Profits lost from not having suffi-cient inventory on hand to satisfy demand.






49. The nonmonetary return offered by an asset when the asset is in short supply - often associated with assets with seasonal production processes.






50. A rate of interest based on the secu-rity's face value.