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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 updated probability that reflects or comes after new information.






2. Unsecured short-term corporate debt that is characterized by a single payment at maturity.






3. A strategy in which a position is hedged by making frequent adjustments to the quantity of the instrument used for hedging in relation to the instrument being hedged.






4. The cash flow available to a company's common shareholders after all operat-ing expenses - interest - and principal payments have been made - and necessary investments in working and fixed capital have been made.






5. The relationship of the quantity of an asset being hedged to the quantity of the deriva-tive used for hedging.






6. An option in which the asset underlying the futures is a commodity - such as oil - gold - wheat - or soybeans.






7. The after-tax net operating profits as a percent of total assets or capital.






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






9. A probability distribution that specifies the probabilities for a group of related random variables.






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






11. The elimination or phasing out of reg-ulations on economic activity.






12. A balance sheet that does not show subtotals for current assets and current liabilities.






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






14. Each value on a binomial tree from which suc-cessive moves or outcomes branch.






15. The slope of the capital market line - indicating the market risk premium for each unit of market risk.






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






17. Individual accounts to which an employee and typically the employer makes contributions - generally on a tax-advantaged basis. The amounts of contributions are defined at the outset - but the future value of the benefit is unknown. The employee bears






18. A probability drawing on per-sonal or subjective judgment.






19. A result indicating that the null hypothesis can be rejected; with reference to an estimated regression coefficient - frequently understood to mean a result indicating that the corresponding population regression coefficient is different from O.






20. A record of receipts from exports of goods and services - payments for imp<ilrts of goods and services - net income and net transfers received from the rest of the world.






21. The existence of an exact linear relation between two or more independent vari-ables or combinations of independent variables.






22. A form ofcommon-size analysis in which the accounts in agiven period are used as the benchmark or baseperiod - and every account is restated in subse-quent periods as a percentage of the base period'ssame account.






23. For data grouped into intervals - the fraction of total observations that are less than the value of the upper limit of a stated interval.






24. In the context of inventory management - the need for inventory as part of the routine production-sales cycle.






25. The earnings per share that a busi-ness could achieve currently under mid-cyclical conditions.






26. With reference to an interval of grouped data - the number of observations in the interval divided by the total number of observa-tions in the sample.






27. European option An option contract that can only be exercised on its expiration date.






28. With reference to a time series - the underly-ing model generating the times series.






29. A solvency ratio measuring the number of times interest and lease payments are covered by operating income - calculated as (EBIT + lease payments) divided by (interest payments + lease payments).






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






31. With respect to inventory accounting - the planned or target unit cost of inventory items or services.






32. The minimum rate of return required by an investor to invest in an asset - given the asset's riskiness.






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






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






35. The amount of cash payable by a company to the bondholders when the bonds mature; the promised payment at maturity sepa-rate from any coupon payment.






36. A mean computed after excluding a stated small percentage of the lowest and highest observations.






37. The differential of infor-mation between corporate insiders and outsiders regarding the company's performance and prospects. Managers typically have more informa-tion about the company's performance and prospects than owners and creditors.






38. A minimum level of cash to be held available-estimated in advance and adjusted for known funds transfers - seasonality - or other factors.






39. The price for immediate purchase of the underlying asset.






40. An investment decision rule that accepts projects or investments for which the IRR is greater than the opportunity cost of capital.






41. The actual return on a debt security if it is held to maturity.






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






43. 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.






44. Covering or containing all possible outcomes.






45. The granting of stock to employees as a form of compensation.






46. An option that gives the holder the right to buy an underlying asset from another party at a fixed price over a specific period of time.






47. Assets that can be most readily con-verted to cash (e.g. - cash - short-term marketable investments - receivables) .






48. A criterion asserting that the optimal portfolio is the one that minimizes the probability that portfolio return falls below a threshold level.


49. The process of obtaining a sample.






50. A type of subsidiary engaged in derivatives trans-actions that is separated from the parent company in order to have a higher credit rating than the parent company.