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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. 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.






2. ID) With respect to random variables - the property of ran-dom variables that are independent of each otherbut follow the identical probability distribution.






3. A trade in two closely related stocks involving the short sale of one and the pur-chase of the other.






4. The establishment of objectives for individuals - groups - or divisions of an organiza-tion that takes into account the allocation of an acceptable level of risk.






5. The expected excess return on the market over the risk-free rate.






6. An ordered listing.






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






8. A trade in two closely related stocks that involves buying the relatively undervalued stock and selling short the relatively overvalued stock.






9. A transformation that subtracts the value of the time series in period t - 1 from its value in period t.






10. Observations that are depen-dent on each other.






11. Investing on the basis of dif-ferential expectations.






12. The quality of being relatively unaffected by a violation of assumptions.






13. A method of revenue recogni-tion in which the company does not recognize any revenue until the contract is completed; used par-ticularly in long-term construction contracts.






14. The statistical measure that indicates the peakedness of a distribution.






15. A condition in the futures markets in which a transaction cannot take place because the price would be beyond the limits.






16. Outflows of economic resources or increases in liabilities that result in decreases in equity (other than decreases because of distribu-tions to owners); reductions in net assets associ-ated with the creation of revenues.






17. A present value model of stock value that views the intrinsic value of a stock as present value of the stock's expected future dividends.






18. The quoted interest rate per period; the stated annual interest rate divided by the number of compounding periods per year.






19. An activity ratio calculated as cost of goods sold divided by average inventory.






20. Probabilities that generally do not vary from person to person; includes a pri-ori and objective probabilities.






21. An amount equal to saving minus investment.






22. The goods and sernces that we buy from people in other countries.






23. The number of units pro-duced and sold at which the company's operating profit is zero (revenues = operating costs).






24. 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






25. A measure of an option-free bond's aver-age maturity. Specifically - the weighted average maturity of all future cash flows paid by a security - in which the weights are the present value of these cash flows as a fraction of the bond's price. A measu






26. A gain in value caused bychanges in price levels. Monetary liabilities expe-rience purchasing power gains during periods ofinflation.






27. The most common type of commun-size analysis - ill which the accounts in a given period are compared to a benchmark item in that same year.






28. 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.






29. The date on which the parties to a swap make payments.






30. The market value of a swap.






31. The differ-ence between net operating assets at the end and the beginning of the period.






32. Costs of inven tories including costs of purchase - costs of conversion - other costs to bring the inventories to their present location and condition - and the allocated portion of) fixed production overhead costs.






33. A depreciation method that allocates evenly the cost of a long-lived asset less its estimated residual value over the estimated useful life of the asset.






34. A contract in which one party has the right to claim a payment from another party in the event that a specific credit event occurs over the life of the contract.






35. An asset that trades in a market in which buyers and sellers meet - decide on a price - and the seller then delivers the asset to the buyer and receives payment. The underlying is the asset or other derivative on which a particular derivative is base






36. Approach to translating for-eign currency financial statements for consolida-tion in which all assets and liabilities are translated at the current exchange rate. The cur-rent rate method is the prevalent method of translation.






37. A quantity computed from or used to describe a sample of data.






38. A hypothesis concern-ing pricing behavior that holds that even though there are only a few firms in an industry - they are forced to price their products more or less com-petitively because of the ease of entry by outsiders. The key aspect of a conte






39. Heteroskedasticity of the error term that is not correlated with the values of the independent variable(s) in the regression.






40. The proportion of a company's assets that is financed with long-term debt.






41. 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.






42. The strongest form of short-term bank borrowing facilities; they are in effect for multiple years (e.g. - 3-5 years) and may have optional medium-term loan features.






43. An Activity ratio calculated as total revenue divided by average net fixed assets.






44. A financial statement that provides information about a company's prof-itability over a stated period of time.






45. A test for conditional het-eroskedasticity in the error term of a regression.






46. Describes a time series whenits expected value and variance are cons tan t andfinite in all periods and when its covariance withitself for a fixed number of periods in the past orfuture is constant and finite in all periods.






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






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






49. The graph of the capital asset pricing model.






50. A subset of a population.