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. The excess of assets over liabilities; the residual interest of shareholders in the assets of an entity after deducting the entity's liabilities.

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


2. An event or piece of information that causes the marketplace to re-evaluate the prospects of a company.






3. A public document that provides the material facts concerning matters on which shareholders will vote.






4. All members of a specified group.






5. A stock's current mar-ket price divided by the most recent four quarters of earnings per share.






6. A fUl !lction giving the probability of joint occurrences of values of stated random variables.






7. The amount for which one can sell some-thing - or the amount one must pay to acquire something.






8. The error of rejecting a true null hypothesis.






9. 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.






10. With reference to equity investors - investors who seek to invest in high-earnings-growth companies.






11. Assets that are expected to be consumed or converted into cash in the near future - typically one year or less.






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






13. A purchase involving a buyer that would benefit from certain synergies associ-ated with owning the target firm.






14. The market value of a swap.






15. The interest earned each period on the original investment; interest calculated on the principal only.






16. An average in which each observation is weighted by an index of its relative importance.






17. Small numbers of observations at either extreme (small or large) ofa sample.






18. The risk associated with operating earnings. Operating earnings are uncertain because total revenues and many of the expendi-tures contributed to produce those revenues are uncertain.






19. A graphical depic-tion of a company's investment opportunities ordered from highest to lowest expected return. A company's optimal capital budget is found where the investment opportunity schedule inter-sects with the company's marginal cost of capit






20. An aggregate of an entity's income tax payable (or recoverable in the case of a tax benefit) and any changes in deferred tax assets and liabili-ties. It is essentially the income tax payable or recoverable if these had been determined based on accoun






21. 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.






22. The process of systematically allocat-ing the cost of long-lived (tangible) assets to theperiods during which the assets are expected toprovide economic benefits.






23. An experiment that can produce one of two outcomes.






24. The annual percentage change in real CDP.






25. Valuation approach that values an asset based on pricing multiples from sales of assets viewed as similar to the subject asset.






26. A process used in a deliverable forward contract in which the long pays the agreed-upon price to the short - which in turn delivers the underlying asset to the long.






27. A combination of interest rate put options designed to hedge a lender against lower rates on a floating-rate loan.






28. The time between settlement dates.






29. A business owned and operated by more than one individual.






30. The revaluation of a financial asset or liability to its current market value or fair value.






31. Members ips in a derivatives exchange.






32. The rate at which periodic interest payments are calculated.






33. 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.






34. As an approach to valuing a company - the sum of the value of the company - assuming no use of debt - and the net present value of any effects of debt on company value.






35. Total assets minus total liabilities.

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


36. Investments in which the investor has no signifi-cant influence or control over the operations of the investee.






37. A graph of a frequency distri-bution obtained by drawing straight lines join-ing successive points representing the class frequencies.






38. With reference to statistical infer-ence - the subdivision dealing with the testing ofhypotheses about one or more populations.






39. With respect to the application of the LIFO inventory method - the liquidation of old - relatively low-priced inventory; happens when the volume of sales rises above the volume of recent purchases so that some sales are made from relatively old - low






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






41. Any test (or procedure) concerned with parameters or whose validity depends on assumptions concerning the population generat-ing the sample.






42. Financial ratios measuring the com-pany's ability to meet its short-term obligations.






43. Temporary differ-ences that result in a taxable amount in a future period when determining the taxable profit as the balance sheet item is recovered or settled. t-Distribution A symmetrical distribution defined by a single parameter - degrees of free






44. Aka marking to market.






45. A public offer whereby the acquirer invites target shareholders to submit ('tender') their shares in return for the proposed payment.






46. A country's record of international trading - borrowing - and lending.






47. The risk that failures by company man-agers to effectively manage a company's environ-mental - social - and governance risk exposures will lead to lawsuits and other judicial remedies - resulting in potentially catastrophic losses for the company; th






48. Mean active return divided by active risk; or alpha divided by the standarddeviation of diversifiable risk.






49. For accounting purposes - the exchange rates that existed when the assets and liabilities were initially recorded.






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