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. A quantitative measure that specifies where data are centered.






2. Research and development costs relating to projects that are not yet completed - such as have been incurred by a company that is being acquired.






3. An estimate of the cost of common equity that is produced by summing the before-tax cost of debt and a risk premium that captures the additional yield on a company's stock relative to its bonds. The addi-tional yield is often estimated using historic






4. The competitive strategy of seeking a compet-itive advantage within a target segment or seg-ments of the industry - either on the basis of cost leadership (cost focus) or differen tiation (differ-entiation focus) .






5. The rate of dividend (and earnings) growth that can be sustained over time for a given level of re turn on equity - keeping the capi tal structure constant and wi thout issuing addi tional common stock.






6. A criterion asserting that the optimal portfolio is the one that minimizes the probability that portfolio return falls below a threshold level.

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


7. A financial instrument that gives one party the right - but not the obligation - to buy or sell an underlying asset from or to another party at a fixed price over a specific period of time. Also referred to as contingent claims.






8. The quantity of goods and services that a country exports to pay for its imports of goods and services.






9. A normal operating expense that has been paid in advance of when it is due.






10. An option that gives the holder the right to buy an underlying asset from another party at a fixed price over a specific period of time.






11. A tax that is imposed by the importing coun-try when an imported good crosses its interna-tional boundary.






12. ROA) A prof-itability ratio calculated as operating income divided by average total assets.






13. An active investment strategy that includes intentional matching of the timing of cash outflows with investment maturities.






14. The price for immediate purchase of the underlying asset.






15. CMT swap A swap in which the floating rate is the rate on a security known as a constant maturity treasury or CMT security.






16. The estimation of an unknown value on the basis of two known values that bracket it - using a straight line between the two known values.






17. A solvency ratio calculated as total debt divided by total debt plus total share-holders ' equi ty.






18. The original time to maturity on a swap.






19. The relationship between option price and volatility.






20. An activity ratio equal to rev-enue divided by average receivables.






21. The smallest level of significance at whichthe null hypothesis can be rejected; also called themarginal significance level.






22. With reference to time-series mod-els - a model in which the growth rate of the time series as a function of time is constant.






23. The use of fixed costs in operations.






24. Costs borne by owners to moni tor the management of the company (e.g. - board of director expenses).






25. Aka Harmonic mean.






26. The amount of time between check issuance and a check's clearing back against the company's account.






27. 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






28. Debt and equity secu-rities not classified as either held-to-maturity or held-for-trading securities. The investor is willing to sell but not actively planning to sell. In general - available-for-sale securities are reported at fair value on the bala






29. The cost associated with holding someasset - including financing - storage - and insurancecosts. Any yield received on the asset is treated as anegative carrying cost.






30. A combination of a long cap and a short floor - or a short cap and a long floor. A col-lar in general can have an underlying other than an interest rate.






31. Differences between tax and financial reporting of revenue (expenses) that will not be reversed at some future date. These result in a difference between the company's effective tax rate and statutory tax rate and do not result in a deferred tax item






32. Total assets minus total liabilities.

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


33. The expected return on an invest-ment minus the risk-free rate.






34. Amounts that a business owes to its vendors for goods and services that were pur-chased from them but which have not yet been paid.






35. The risk associated with accounting standards that vary from country to country or with any uncertainty about how certain transac-tions should be recorded.






36. The ability to make additional investments in a project at some future time if the financial results are strong.






37. A measure of the time needed to convert raw materials into cash from a sale; it con-sists of the number of days of inventory and the number of days of receivables.






38. 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.






39. The difference between the observed value of a statistic and the quantity it is intended to estimate.






40. CreaLing a contrac t with standard and generally accepted terms - which makes it moreacceptable to a broader group of participants.






41. Public-company com-parables for the company being valued.






42. The perceived ability of the bor-rower to pay what is owed on the borrowing in a timely manner; it represents the ability of a com-pany to withstand adverse impacts on its cash flows.






43. The difference between net operating assets at the end and the beginning of the period compared to the average net operating assets over the period.






44. With reference to fundamental factor models - the value of the attribute for an asset minus the average value of the attribute across all stocks - divided by the standard deviation of the attribute across all stocks.






45. The relationship of the quantity of an asset being hedged to the quantity of the deriva-tive used for hedging.






46. A company's chosen propor-tions of debt and equity.






47. Segment liabilities divided by segment assets.






48. The actual cash that would be avail-able to the company's investors after making all investments necessary to maintain the company as an ongoing en terprise (also referred to as free cash flow to the firm); the internally generated funds that can be






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






50. The currency in which finan-cial statement amounts are presented.