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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 interest rate swap in which the notional principal is indexed to the level of interest rates and declines with the level ofinterest rates according to a predefined schedule. This type of swap is frequently used to hedge secu-rities that are prepai






2. The quantity of goods and services that a country exports to pay for its imports of goods and services.






3. Aka 'Market efficiency.






4. 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.






5. The amount available for fixed costs and profit after paying variable costs; rev-enue minus variable costs.






6. To sell the assets of a company - division - or subsidiary piecemeal - typically because of bank-ruptcy; the form of bankruptcy that allows for the orderly satisfaction of creditors' claims after which the company ceases to exist.






7. A balance sheet organized so as to group together the various assets and liabilities into subcategories (e.g. - current and noncurrent) .






8. A variation of the market approach; considers actual transactions in the stock of the subject private company.






9. A market index portfolio.






10. The amount of dispersion rela-tive to a reference value or benchmark.






11. 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.






12. Any outcome or specified set of outcomes of a random variable.






13. The condition in futures markets in which futures prices are higher than expected spot prices.






14. A financial statement that reconciles the beginning-of-period and end-of-period balance sheet values of shareholders' equity; provides information about all factors affecting shareholders' equity.

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15. The owner of an asset that grants the right to use the asset to another party.






16. A scheme of measuring differ-ences. The four types of measurement scales are nominal - ordinal - interval - and ratio.






17. An agreement between two parties to exchange a series of future cash flows.






18. A dollar deposited outside the United States.






19. With reference to the presenta-tion of expenses in an income statement - the grouping together of expenses by similar nature - e.g. - all depreciation expenses.






20. The actual cash that would be avail-able to the company's investors after making all investments necessary to maintain the company as an ongoing en terprise (also referred to as free cash flow to the firm); the internally generated funds that can be






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






22. A measure of dispersion relat-ing to a population - calculated as the mean of the squared deviations around the population mean.






23. Accounting that satisfies the condition that all changes in the book value of equity other than transactions with owners are reflected in income. The bottom-line income reflects all changes in shareholders' equity arising from other than owner transa






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






25. With reference to assets - the amount of cash or cash equivalents that could currently be obtained by sell ing the asset i an orderly disposal; with reference to lia-bilities - the undiscounted amount of cash or cash equivalents expected to be paid t






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






27. As used in option pricing - the standard deviation of the continuously compounded returns on the underlying asset.






28. An extra return that compen-sates investors for expected inflation.






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






30. 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.






31. When assets trans-lated at the current exchange rate are greater in amount than liabilities translated at the current exchange rate. Assets exposed to translation gains or losses exceed the exposed liabilities.






32. An option strategy that is equiva-lent to a short butterfly spread.






33. The P/E to-growth ratio - calculated as the stock's PI E divided by the expected earnings growth rate.






34. A possible value of a random variable.






35. An activity ratio equal to the number of days in period divided by receivables turnover.






36. The risk associated with the pos-sibility that a payment due at a later date will not be made.






37. A measure of sensitivity; the incremental change in one variable with respect to an incre-mental change in another variable.






38. An activity ratio equal to the number of days in the period divided by inventory turnover over the period.






39. The analysis of the strength of the linear relationship between two data series.






40. The percentage of a market that a particular fi rm supplies; used as the primary measure of monopoly power.






41. A permissible delivery procedure used by futures market participants - in which the long and short arrange a delivery pro-cedure other than the normal procedures stipu-lated by the futures exchange.






42. A bias caused by using information that was not available on the test date.






43. 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.






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






45. The variability around the central tendenoy.






46. The portion of the dependent variable that is not explained by the independent vari-able(s) in the regression.






47. Options that - if exercised - would require the payment of more money than the value received and therefore would not be cur-rently exercised.






48. A model of stock valuation that views intrinsic value of stock as the sum of book value per share plus the present value of the stock's expected future residual income per share.






49. Analysts who work at brokerages.






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






Can you answer 50 questions in 15 minutes?



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