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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 amount of money that a trader deposits in a margin account. The term is derived from the stock market practice in which an investor bor-rows a portion of the money required to purchase a certain amount of stock. In futures markets - there is no b






2. The probability of correctly rejecting the null-that is - rejecting the null hypothesis when it is false.






3. 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.






4. The company in a merger or acquisition that is acquiring the target.






5. Assets lacking physical substance - such as patents and trademarks.






6. With respect to double-entry accounting - a debit records increases of asset and expense accounts or decreases in liability and owners' equity accounts.






7. Cannibalization occurs when an investment takes customers and sales away from another part of the company.






8. A reserve created against deferred tax assets - based on the likelihood of realizing the deferred tax assets in future account-ing periods.






9. The financial state-ment that presents an entity's current financial position by disclosing resources the entity con-trols (its assets) and the claims on those resources (its liabilities and equity claims) - as of a particular point in time (the date






10. Each component put option in a floor.






11. An inter-national agreement signed in 1947 to reduce tar-iffs on international trade.






12. The actual value of a variable minus its pre-dicted (or expected) value.






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






14. Method of accounting in which the effect of transactions on financial condition and income are recorded when they occur - not when they are settled in cash.






15. The mix of debt and equity that a company uses to finance its business; a company's specific mixture of long-term financing.






16. A variation of a floating-rate note that has some type of unusual characteristic such as a leverage factor or in which the rate moves opposite to interest rates.






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






18. An acquisition in which the acquirer purchases the target company's assets and pay-ment is made directly to the target company.






19. The official price - designated by the clearinghouse - from which daily gains and losses will be determined and marked to market.






20. 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






21. A record of foreign investment in a country minus its investment abroad.






22. A guarantee from the clear-inghouse that if one party makes money on a transaction - the clearinghouse ensures it will be paid.






23. An option in which the underlying is a bond; primarily traded in over-the-counter markets.






24. The fixed price or rate at which the transaction scheduled to occur at the expiration of a forward contract will take place. This price is agreed on at the initiation date of the contract.






25. A time series that is not covariance station-ary is said to have a unit root.






26. Economic characteristics of a busi-ness such as profitability - financial strength - and risk.






27. A transformation that involves sub-tracting the mean and dividing the result by the standard deviation.






28. A theory of economic growth based on the idea that real CDP per person grows because of the choices that people make in the pursuit of profit and that growth can persist indefinitely.






29. An annuity having a first cash flow that is paid immediately.






30. Income approach that values an asset based on estimates of future cash flows discounted to present value by using a discount rate reflective of the risks associated wi th the cash flows.






31. Theories that posit that cor-porate executives are motivated to engage in mergers to maximize the size of their company rather than shareholder value.






32. A stage of growth in which a company typically enjoys rapidly expanding markets - high profit margins - and an abnormally high growth rate in earnings per share.






33. A financial statement that reconciles beginning-of-period and end-of-period balance sheet values of cash; provides information about an entity's cash inflows and cash outflows as they pertain to oper-ating - investing - and financing activities.






34. Corporate earnings are taxed twice when paid out as dividends. First - corporate earn-ings are taxed regardless of whether they will be distributed as dividends or retained at the G-13 corporate level - and second - dividends are taxed again at the i






35. Debt (fixed-income) securities that a company intends to hold to matu-rity; these are presented at their original cost - updated for any amortization of discounts or pr.emiums.






36. With respect to double-entry accounting - a credit records increases in liability - owners' equity - and revenue accounts or decreases in asset accounts; with respect to borrowing - the willing-ness and ability of the borrower to make promised paymen






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






38. A procedure for determining the interest on a loan or bond in which the interest is deducted from the face value in advance.






39. A form of data min-ing that applies information developed by previ-ous researchers using a dataset to guide curren t research using the same or a related dataset.






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






41. A comparison of revenues with working capital to produce a measure that shows how efficiently working capital is employed.






42. The day that the company actually mails out (or electronically transfers) a dividend payment.






43. The arithmetic mean value of a population; the arithmetic mean of all the obser-vations or values in the population.






44. A range that has a given proba-bility that it will contain the population parameter it is intended to estimate.






45. The process of identifYing the level of risk an entity wants - measuring the level of risk the entity currently has - taking actions that bring the actual level of risk to the desired level of risk - and monitoring the new actual level of risk so tha






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






47. A bank commitment to extend credit up to a pre-specified amount; the commitment is considered a short-term liability and is usually in effect for 364 days (one day short of a full year).






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






49. The study of how data can besummarized effectively.






50. R The correlation between the actual and forecasted values of the dependent variable in a regression.