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






2. A value at or below which a stated fraction of the data lies.






3. Future benefits promised to the employee regardless of continuing service. Bene-fits typically vest after a specified period of service or a specified period of service combined with age.






4. Ratios that measure a company's ability to generate profitable sales from its resources (assets).






5. Ratios that measure a company's ability to meet its long-term obligations.






6. The share price at a particular point in the future.






7. The value to a specific buyer - tak-ing account of potential synergies based on the investor's requirements and expectations.






8. The differences between actual and predicted value of time series outside the sample period used to fit the model.






9. 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.






10. The square root of the average squared forecast error; used to compare the out-of-sample forecasting perfor-mance of forecasting models.






11. Analysis that shows the range of possible outcomes as specific assumptions are changed.






12. The combining of the results of oper-ations of subsidiaries with the parent compaIL y to present financial statements as if they were a sin-gle economic unit. The asset - iabilities - revenues and expenses of the subsidiaries are combined with those






13. An amount equal to net taxes minus government expenditure on goods and services.






14. Systems that capture transaction data at the physical location in which the sale is made.






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






16. The value of exports of goods and ser-vices minus the value of imports of goods and services.






17. The amount charged for the delivery of goods or services in the ordinary activities of a business over a stated period; the inflows of eco-nomic resources to a company over a stated period.






18. An option strategy in which a long position in an asset is combined with a long posi-tion in a put.






19. Quantiles that divide a distribution into four equal parts.






20. A beta that is based at least in part on fundamental data for a company.






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






22. An active investment strategy whereby the timing of cash outflows is not matched with investment maturities.






23. A combination of a European call and a risk-free bond that matures on the option expiration day and has a face value equal to the exer-cise price of the call.






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






25. An arrangement whereby a customer authorizes a debit to a demand account; typically used by companies to collect routine pay-ments for services.






26. An attempt to take control of a company through a shareholder vote.






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






28. Any departure of the market price of an asset from the asset's estimated intrinsic value.






29. Financial ratios involving bal-ance sheet items only.






30. A stage of growth in which the com-pany reaches an equilibrium in which investment opportunities on average just earn their opportu-nity cost of capital.






31. An entity associated with a futures market that act~ as middleman between the con-tracting parties and guarantees to each party the performance of the other.






32. An activity ratio equal to the number of days in a period divided by the inventory ratio for the period; an indication of the number of days a company ties up funds in inventory.






33. A sample measure of the degree of a distribution's peakedness in excess of the normal distribution's peakedness.






34. A method of accounting in which combined companies were portrayed as if they had always operated as a single economic entity. Called pooling of interests under U.S. GAAP and uniting of interests under IFRS. (No longer allowed under U.S. GAAP or IFRS.






35. The system of principles - policies - procedures - and clearly defined responsi-bilities and accountabilities used by stakeholders to overcome the conflicts of interest inherent in the corporate form.






36. The required rate of return on com-mon stock.






37. Observations on characteristic(s) of the same observational unit through time.






38. The use of inven-tory as collateral for a loan; similar to a trust receipt arrangement except there is a third party (i.e. - a warehouse company) that supervises the inventory.






39. An intangible that cannot be acquired singly and that typically possesses an indefinite benefit period; an example is account-ing goodwill.






40. A list of accounts used in an entity's accounting system.






41. A swap in which one party agrees to pay the total return on a security. Often used as a credit derivative - in which the underlying is a bond.






42. The portion of an entity's income that is subject to income taxes under the tax laws of its jurisdiction.






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






44. In the context ofmerger analysis - it is an estimate of a target com-pany's value found by discounting the company's expected future free cash flows to the present.






45. With reference to equity investors - investors who are focused on paying a relatively low share price in relation to earnings or assets per share.






46. An offset to property - plant - and equipment (PPE) reflecting the amount of the cost of PPE that has been allocated to current and previous accounting periods.






47. The portion of the minimum-variance frontier beginning with the global mmlmum-variance portfolio and continuing above it; the graph of the set of portfolios offering the maximum expected return for their level of variance of return.






48. The annual return that an investor earns on a bond if the investor purchases the bond today and holds it until maturity.






49. A transaction between two affiliates - an investor company and an associate company such that the investor company records a profit on its income statement. An example is a sale of inven-tory by the investor company to the associate.






50. Short-term obligations - such as accounts payable - wages payable - or accrued liabil-ities - that are expected to be settled in the near future - typically one year or less.