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






2. Options that relate to investment deci-sions such as the option to time the start of a proj-ect - the option to adjust its scale - or the option to abandon a project that has begun.






3. The annual percentage change in real CDP.






4. Interest earned but not yet paid.






5. A solvency ratio calculated as EBIT divided by interest payments.






6. An association or relationship between variables that cannot be graphed as a straight line.






7. A trader holding a position open some-what longer than a scalper but closing all posi-tions at the end of the day.






8. The characteristic of minimum-variance frontiers that they are sensitive to small changes in inputs.






9. For a give period - equal to begi ning inventory minus entling inventory JDlusthe cost 0 goods auqui red or produced duringthe period.






10. A third party that is sough t out bX the tar-get c0mpany's board to Burchase a substantial minority stake in the target-enough to block a hostile takeover without selling the entire company.






11. Standard errors of the esti-mated parameters of a regression that correct for the presence of heteroskedastici ty in the regres-sion's error te






12. An equation expressing the equiva-lence (parity) of a portfolio of a call and a bondwith a portfolio of a put and the underlying -which leads to the relationship between put andcall prices






13. The risk attributed to the operating cost structure - in particular the use of fixed costs in operations; the risk arising from the mix of fixed and variable costs; the risk that a company's operations may be severely affected by environ-mental - soc






14. The hypothesis accepted when the null hypothesis is rejected.






15. An approach to trading that uses pairs of closely re ated stocks - buying the relatively undervalued stock and selling short the relatively overvalued stock.






16. A contract that spans a number of accounting periods.






17. The risk associated with changes in the relative attractiveness of products and services offered for sale - arising out of the competitive effects of changes in exchange rates.






18. 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.






19. In the fixed income markets - to price a security on the basis of valuation-relevant char-acteristics (e.g. - debt-rating approach).






20. The pro-portion of the ownership of a subsidiary not held by the parent (controlling) company.






21. An approach to portfolio analysis using expected means - variances - and covariances of asset returns.






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






23. A record of the change in official reserves - which are the government's holdings offoreign currency.






24. An act passed by the U.S. Con-gress in 2002 that created the Public Company Accounting Oversight Board (PCAOB) to oversee auditors.






25. A form of active strategy which entails scheduling maturities on a systematic basis within the investment portfolio such that invest-ments are spread out equally over the term of the ladder.






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






27. The expected return on equi-ties minus the risk-free rate; the premium that investors demand for investing in equities.






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






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






30. The average squared deviation below a target value.






31. The risk of a change in value of a n asset or liability denomi-nated in a foreign currency due to a change in exchange rates.






32. A commercial imple-mentation of the residual income concept; the computation of EVA® is the net operating profit after taxes minus the cost of capital - where these inputs are adjusted for a number of items.






33. 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






34. Estimate of the aver-age number of days it takes to collect on credit accounts.






35. The rate of dividend (and earnings) growth that can be sustained over time for a given level of re turn on equity - keeping the capi tal structure constant and wi thout issuing addi tional common stock.






36. 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.






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






38. Observations over individual units at a point in time - as opposed to time-series data.






39. The risk associated with the pos-sibility that a payment currently due will not be made.






40. Generally - a synonym for revenue; 'sales' is generally understood to refer to the sale of goods - whereas 'revenue' is understood to include the sale of goods or services.






41. Activities related to obtaining or repaying capital to be used in the business (e.g. - equity and long-term debt).






42. A straight-line relationship - as opposed to a relationship that cannot be graphed as a straight line.






43. Futures contracts in which the underlying is a traditional agricultural - metal - or petroleum product.






44. An investment decision rule that states that an investment should be undertaken if its NPV is positive but not undertaken if its NPV is negative.






45. The procedure of drawing a sample to satisfy the definition of a simple ran-dom sample.






46. The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets.






47. With reference to the presen-tation of expenses in an income statement - the grouping together of expenses serving the same function - e.g. - all items that are costs of good sold.






48. A model that specifies an asset's value relative to the value of another asset.






49. Assets that are expected to provide economic benefits over a future period of time - typically greater than one year.






50. A quoted interest rate that does not account for compounding within the year.