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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 government's holding of foreign cun; - e.!}cy.






2. Sales minus the cost of sales ~.e . - the cost of goods sold for a manufactur-ing cOlp pany) .






3. The risk that portfolio value will fall below some minimum acceptable level over some time horizon.






4. A purchase involving a buyer having essentially no material synergies with the target (e.g. - the purchase of a private company by a company in an unrelated industry or by a private equity firm would typically be a financial transaction) .






5. A model for pncmg futurescontracts in which the futures price is determinedby adding the cost of carry to the spot price.






6. Asset outflows not directly related to the ordi-nary activities of the business.






7. The smaller the stake that managers have in the company - the less is their share in bearing the cost of excessive perquisite consumption or not giving their best efforts in running the company.






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






9. With reference to a random vari-able - the property of having characteristics such as mean and variance that are not constant through time.






10. Shares that were issued and subse-quently repurchased by the company.






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






12. A si gle numerical estimate of an unknown quantity - such as a population parameter.






13. A rule explaining the uncon-ditional probability of an event in terms of proba-bilities of the event conditional on mutually exclusive and exhaustive scenarios.






14. A country that is borrowing more from the rest of the world than it is lending to it.






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






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






17. The analysis of the total variability of a dataset (such as observations on the dependent variable in a regression) into components representing different sources of variation; with reference to regression - ANOVA provides the inputs for an F-test of






18. The price received to sell an asset or trans-fer a liability.






19. Cash-settled for-ward contracts - used predominately with respect to foreign exchange forwards.






20. A forecasting process in which the next period's value as predicted by the forecasting equation is substituted into the right-hand side of the equation to give a predicted value two periods ahead.






21. The amount by which the takeover price for each share of stock must exceed the current stock price in order to entice shareholders to relinquish control of the com-pany to an acquirer.






22. The extent to which a company's operations are predictable with substantial confidence.






23. 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.






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






25. The owners of a joint venture. Each is active in the management and shares control of the joint venture.






26. The principles governing equivalence relationships between cash flows with different dates.






27. Behavior on the part of a firm that allows it to comply with the letter of the law but violate the spirit - significantly lessening the law's effects.






28. Income as reported on the income statement - in accordance with prevailing account-ing standards - before the provisions for income tax expense.






29. Correlation between adj acent observations in a time ser ies.






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






31. A number between - 1 and + 1 that measures the co-movement (linear association) between two random variables.






32. An exchange rate is deter-mined by demand and supply with no direct inter-vention in the foreign exchange market by the central bank.






33. Segment liabilities divided by segment assets.






34. Aka 'Market efficiency.






35. The study of how data can besummarized effectively.






36. Analysts who work for investment management fi rms - trusts - a d bank trust depart-ments - and similar institutions.






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






38. 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.






39. A quoting convention that annualizes - on a 360-day year - the discount as a percentage of face value.






40. In the context of the Treynor-Black model - the portfolio formed by mixing analyzed stocks of perceived nonzero alpha values. This portfolio is ultimately mixed with the passive mar-ket index portfolio.






41. Company growth in output or sales that is achieved by buying the necessary resources externally (i.e. - achieved through mergers and acquisitions) .






42. The condition in futures markets in which futures prices are lower than expected spot prices.






43. CAPM An adaptation of the CAPM that adds to the CAPM a premium for small size and company-specific risk.






44. A sample measure of the degree of dispersion of a distribution - calculated by dividing the sum of the squared deviations from the sam-ple mean by the sample size minus 1.






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






46. Earnings adjusted for nonrecur-ring - non-economic - or other unusual items to elim-inate anomalies andlor facilitate comparisons.






47. The currency of the primary economic environment in which an entity operates.






48. The rate of return from a cash-and-carry transaction implied by the futures price relative to the spot price.






49. A matrix or square array whoseentries are covariances; also known as a variance-covariance matrix.






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