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. A decision rule for choos-ing between two investments based on their means and variances.






2. An estimate of the average time that elapses between paying suppliers for materi-als and collecting cash from the subsequent sale of goods produced.






3. The present discounted value of future cash flows: For assets - the present dis-counted value of the future net cash inflows that the asset is expected to generate; for liabilities - the present discounted value of the future net cash outflows that a






4. Earnings exclud-ing nonrecurring components.






5. An option in which the holder has the right to make a known interest payment and receive an unknown interest payment.






6. The ratio ofthe percentage change in operating income to the percentage change in units sold; the sensitivity of operating income to changes in units sold.






7. A mean computed after assigning a stated percent of the lowest values equal to one specified low value - and a stated percent of the highest values equal to one specified high value.






8. A distribution that specifies the probabilities of a random variable's possible outcomes.






9. An annuity with a first cash flow that is paid one period from the present.






10. Sales minus the cost of sales ~.e . - the cost of goods sold for a manufactur-ing cOlp pany) .






11. A forward contract in which the underlying is a foreign currency.






12. Dummy variables used as dependent variables rather than as inde-pendent variables.






13. The value to a specific buyer - tak-ing account of potential synergies based on the investor's requirements and expectations.






14. The amount of book value (also called carrying value) of common equity per share of common stock - calculated by dividing the book value of shareholders' equity by the num-ber of shares of common stock outstanding.






15. A transaction between two affiliates - an investor company and an associate company such that the investor company records a profit on its income statement. An example is a sale of inven-tory by the investor company to the associate.






16. Not symmetrical.






17. Desired investment outcomes; includes risk objectives and return objectives.






18. A profitability ratio calculated as (net income - preferred divi-dends) divided by average common equity; equal to the return on equity ratio when no preferred equity is outstanding.






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






20. Assets less liabilities; the residual interest in the assets after subtracting the liabilities.






21. The relationship amongputs - calls - and forward contracts.






22. The graph of the set of portfolios that have minimum variance for their level of expected return.






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






24. Serial correlation in which a positive e rror for one observation increases the chance of a negative error for another observation - and vice versa.






25. The price paid to buy an asset.






26. The percentage of total earnings paid out in dividends in any given year (in per-share terms - DPS/ EPS).






27. The difference between the observed value of a statistic and the quantity it is intended to estimate.






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






29. A procedure by which a population is divided into subpopulations (strata) based on one or more classification criteria. Sim-ple random samples are then drawn from each stratum in sizes proportional to the relative size of each stratum in the populati






30. Method of valu-ing property based on recen t sales prices of simi-lar properties.






31. A number between - 1 and + 1 that measures the co-movement (linear association) between two random variables.






32. With reference to cash flow statements - a format for the presenta-tion of the statement which - in the operating cash flow section - begins with net income then shows additions and subtractions to arrive at operatingcash flow.






33. When a company is acquired and the purchase price is less than the fai r value of the net assets. The current treatment of the excess of fair value over the purchase price is diffe re t under IFRS and U.S. CAAP. The excess is never accounted for as n






34. An activity ratio calculated as cost of goods sold divided by average inventory.






35. 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.






36. An approach to using price multiples that relates a price multiple to forecasts of fundamentals through a discounted cash flow model.






37. An accelerated depre-ciation method - i.e. - one that allocates a relativelylarge proportion of the cost of an asset to the early years of the asset's useful life.






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






39. With eference to grouped data - a se t or val-ues within w ich an observation falls.






40. An entity (partnership - corporation - or other legal form) where control is shared by two or more entities called venturers.






41. The positive square root of the sample variance.






42. The actual amount paid for income taxes in the period; not a provision - but the actual cash outflow.






43. An option strategy in which a position in an asset is converted to a risk-free position with a position in a specific number of options. The number of options per unit of the underlying changes through time - and the position must be revised to maint






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






45. The owners' remaining claim on the company's assets after the liabilities are deducted.






46. CMT A hypothetical U.S. Treasury note with a constant maturity. A CMT exists for various years in the range of 2 to






47. The probability-weighted average of the possible outcomes ofa random variable.






48. Aka 'Residual income. '






49. Costs borne by management to assure owners that they are working in the own-ers' best interest (e.g. - implicit cost of non-compete agreements).






50. The buyer of a derivative contract. Also refers to the position of owning a derivative.







Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?


Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests