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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. A varia-tion ofVAR that reflects credit risk.






2. Instruments that payinterest as the difference between the amountborrowed and the amount paid back.






3. A breakdown of accounts into cate-gories of days outstanding.






4. A solvency ratio calculated as total debt divided by total shareholders' equity.






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






6. With reference to investmentselection processes - an approach that involves selection from all securities within a specified investment universe - i.e. - without prior narrowiNg of the universe on the bas' s of macroeconomj c or overall market consid






7. 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.






8. A country that is lending more to the rest of the world than it is borrowing from it.






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






10. The return that an investorearns during a specified holding period; a syn-onym for total return.






11. The required rate of return on com-mon stock.






12. The risk associated with interest rates - exchange rates - and equity prices.






13. The science of describing - analyzing - and drawing conclusions from data; also - a collection of numerical data.






14. The amount at which an asset or liability is valued according to account-ing principles.






15. A merger involving compa-nies that are in unrelated businesses.






16. The restatement of financial statement items using a common denominator or reference item that allows one to identify trends and major differences; an example is an income statement in which all items are expressed as a percent of revenue.






17. A money measure of the mini-mum value of losses expected during a specified time period at a given level of probability.






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






19. The goods and sernces that we buy from people in other countries.






20. Said of a sale in which proceeds are to be paid in installments over an extended period of time.






21. 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.






22. An increment or premium to value associated with a controlling ownership interest in a company.






23. The day that the corporation issues a statement d eclaring a specific dividend.






24. A limit move in the futures market in which the price at which a transaction would be made is at or above the upper limit.






25. The owners of a joint venture. Each is active in the management and shares control of the joint venture.






26. The probability that an asset's value moves down in a model of asset price dynamics.






27. A bank commitment to extend credit up to a pre-specified amount; the commitment is considered a short-term liability and is usually in effect for 364 days (one day short of a full year).






28. Debt with the added feature that the bondholder has the option to exchange the debt for equity at prespecified terms.






29. An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return.






30. A valuation ratio calculated as price per share divided by sales per share.






31. The use of inven-tory as collateral for a loan; similar to a trust receipt arrangement except there is a third party (i.e. - a warehouse company) that supervises the inventory.






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






33. A random variable that can take on at most a countable number of possi-ble values.






34. Agreements made by a company in bankruptcy under which a company's capital struc-ture is altered and/ or alternative arrangements are made for debt repayment; U.S. Chapter II bankruptcy. The company emerges from bank-ruptcyas a going concern.






35. An agreement between two parties in which one party - the buyer - agrees to buy from the other party - the seller - an underlying asset at a later date for a price established at the start of the contract.






36. A measure of the co-movement (linearassociation) between two random variables.






37. The assumption of equal priorprobabilities.






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






39. A tabular display of data summarized into a relatively small number of intervals.






40. A set of observations on a variable's out-comes in different time periods.






41. Above average or abnormally high growth rate in earnings per share.






42. A qualitative-dependent-variable multi-ple regression model based on the logistic proba-bility distribution.






43. Not symmetrical.






44. The combining of the results of oper-ations of subsidiaries with the parent compaIL y to present financial statements as if they were a sin-gle economic unit. The asset - iabilities - revenues and expenses of the subsidiaries are combined with those






45. The smaller the stake that managers have in the company - the less is their share in bearing the cost of excessive perquisite consumption or not giving their best efforts in running the company.






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






47. The number of observations in a given interval (for grouped data) .






48. Netting the market values of all derivative contracts between two parties to deter-mine one overall value owed by one party to another in the event of bankruptcy.






49. A dollar deposited outside the United States.






50. A time series that is not covariance station-ary is said to have a unit root.