Test your basic knowledge |

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 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






2. The periodic investment of a fixed amount of money.






3. A forward contract in which the underlying is a bond.






4. The contri-bution to active risk squared resulting from the portfolio's active weights on individual assets as those weights interact with assets' residual risk.






5. The risk that govern-mental laws and regulations directly or indirectly affecting a company's operations will change with potentially severe adverse effects on the com-pany's continued profitabiliny and even its long-term sustainability.






6. The process of obtaining a sample.






7. Options that - if exercised - would result in the value received being worth more than the payment required to exercise.






8. The income tax owed by the company on the basis of taxable income.






9. The positive square root of semivari-ance (sometimes called semistandard deviation) .






10. A weighted average of the after-tax required rates of return on a company's common stock - preferred stock - and long-term debt - where the weights are the fraction of each source of financing in the company's target capital structure.






11. A swap in which the floating payments have a lower limit.






12. A form ofcommon-size analysis in which the accounts in agiven period are used as the benchmark or baseperiod - and every account is restated in subse-quent periods as a percentage of the base period'ssame account.






13. With reference to statistical infer-ence - the subdivision dealing with the testing ofhypotheses about one or more populations.






14. A standardized measure of systematic risk based upon an asset's covariance with the market portfolio.






15. An option strategy that is equiva-lent to a short butterfly spread.






16. A model of stock val-uation that views a stock's intrinsic value as the present value of expected future free cash flows to equity.






17. A swap transaction in which at least one cash flow is tied to the return to an equity portfo-lio position - often an equity index.






18. A two-dimensional plot of pairs of obser-vations on two data series.






19. The estimated cost of equity capital in money terms.






20. A solvency ratio calculated as total debt divided by total shareholders' equity.






21. The proportional annual benefit that results from making an investment.






22. Any action other than a tariff that restricts international trade.






23. The observation that P /Es tend to be high on depressed EPS at the bottom of a business cycle - and tend to be low on unusually high EPS at the top of a business cycle.






24. The relationship between the price of the underlying and an option's exercise price.






25. American Free Trade Agreement An agree-ment - which became effective on January 1 - 1994 - to eliminate all barriers to international trade between the United States - Canada - and Mexico after a 15-year phasing-in period.






26. An option strategy in which a position in an asset is converted to a risk-free position with a position in a specific number of options. The number of options per unit of the underlying changes through time - and the position must be revised to maint






27. The risk associated with the pos-sibility that a payment currently due will not be made.






28. A probability distribution that specifies the probabilities for a group of related random variables.






29. A portfolio with sensitivity of 1to the factor in question and a sensitivity of 0 to allother factors.






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






31. Individuals or companies b hat execute fu tures transactions for other parties off the exchange.






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






33. A diagram with branches emanating from nodes representing either mutually exclu-sive chance events or mutually exclusive decisions.






34. An acceler-ated depreciation method that involves depreciat-ing the asset at double the straight-line rate. This rate is multiplied by the book value of the asset at the beginning of the period (a declining balance) to calculate depreciation expense.






35. The risk associated with operating earnings. Operating earnings are uncertain because total revenues and many of the expendi-tures contributed to produce those revenues are uncertain.






36. For data grouped into intervals - the fraction of total observations that are less than the value of the upper limit of a stated interval.






37. In reference to short-term cash man-agement - an investment strategy characterized by monitoring and attempting to capitalize on mar-ket conditions to optimize the risk and return relationship of short-term investments.






38. An option on the yield spread on a bond.






39. An approach to managing inve tory based on expected demand and the predictability of demand; the ordering point for new inventory is determined based on the costs of ordering and carrying inventory - such that the total cost associated with inventory






40. An extra return that compen-sates investors for expected inflation.






41. A quantity - calculated based on a sam-ple - whose value is the basis for deciding whether or not to reject the null hypothesis.






42. Regulation that allowsprices to reflect only the actual average cost ofproduction and no monopoly profits.






43. The risk associated with the conversion of foreign financial statements into domestic currency.






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






45. P/E calculated on the basis of a forecast of EPS; a stock's current price divided by next year's expected earnings.






46. A test of a strategy or model using a sample outside the time period on which the strategy or model was developed.






47. A quantitative measure that describes the location or distribution of data; includes not only measures of central tendency but also other measures such as percentiles.






48. Any outcome or specified set of outcomes of a random variable.






49. A valuation ratio calculated as price per share divided by cash flow per share.






50. A variation of the monetary/ nonmonetary translation method that requires not only monetary assets and liabilities - but also nonmonetary assets and liabilities that are mea-sured at their current value on the balance sheet date to be translated at t







Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?


Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests