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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. The use of inventory as collateral for a loan. The inventory is segregated and held in trust - and the proceeds of any sale must be remitted to the lender immediately. t-Test A hypothesis test using a statistic (I-statistic) that follows a t-<listrib






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






3. A combination of a European call and a risk-free bond that matures on the option expiration day and has a face value equal to the exer-cise price of the call.






4. 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.






5. An electronic payment network available to businesses - individuals - and financial institutions in the United States - U.S. -Territories - and Canada.






6. 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.






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






8. An experiment that can produce one of two outcomes.






9. A procedure for determining the interest on a bond or loan in which the interest is added onto the face value of a contract.






10. The official price - designated by the clearinghouse - from which daily gains and losses will be determined and marked to market.






11. An aggregate of an entity's income tax payable (or recoverable in the case of a tax benefit) and any changes in deferred tax assets and liabili-ties. It is essentially the income tax payable or recoverable if these had been determined based on accoun






12. A measurement scale that sorts data into categories that are ordered (ranked) with respect to some characteristic.






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






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






15. 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).






16. A factor related to the econ-omy - such as the inflation rate - industrial produc-tion - or economic sector membership. acroeconomic factor model A multifac tor model in which the factors are surprises in macroeco-nomic variables that significan tly






17. The value of the U.S. dollar expressed in units of foreign currency per U.S. dollar.






18. With reference to assets - the amount of cash or cash equivalents that would have to be paid to buy the same or an equivalent asset today; with reference to liabilities - the un discounted amount of cash or cash equivalents that would be required to






19. A quantity computed from or used to describe a sample.






20. An electronic payment system used widely in Europe and Japan.






21. The intercept and slope coefficient(s) of a regression.






22. The government's holding of foreign cun; - e.!}cy.






23. A synonym for robust standard errors.






24. An option that gives the holder the right to sellan underlying asset to another party at a fixedprice over a specific period of time.






25. The number of shares that target stockholders are to receive in exchange for each of their shares in the target company.






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






27. The hypothesis that higher debt levels discipline managers by forcing them to make fixed debt service payments and by reducing the company's free cash flow.






28. The net amount of cash provided from operating activities.






29. An estimation formula; the formula used to compute the sample mean and other sample statistics are examples of estimators.






30. A trend in which the dependent vari-able changes at a constant rate with time.






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






32. An asset's sensitivity to a particular factor; a mea-sure of the response of return to each unit of increase in a factor - holding all other factors constant.






33. Sales on a bill-and-hold basis involve selling products but not delivering those products until a later date.






34. The period benefited~y the employee's service - usually th e period between the grant date and the vesting date.






35. Small numbers of observations at either extreme (small or large) ofa sample.






36. The application of a set of criteria to reduce a set of potential investments to a smaller set having certain desired characteristics.






37. The quantity of real CDP pro-duced by an hour of labor.






38. A non-operating entity created to carry out a specified purpose - such as leasing assets or securitizing receivables; can be a corporation - partnership - trust - limited liability - or partnership formed to facilitate a specific type of business act






39. The divisor in the expression for the value of a perpetuity.






40. Regression that models the straight-line relationship between the dependent and independen t variable (s) .






41. Aka Liquidity discount.






42. A long-term pattern of movement in a partic-ular direction.






43. A pre-offer takeover defense mech-anism involving the corporate charter (e.g. - stag-gered boards of directors and supermajority provisions) .






44. I) An interest rate swap involving two floating rates. 2) A swap in which both parties pay a floating rate.






45. A hypothesis concern-ing pricing behavior that holds that even though there are only a few firms in an industry - they are forced to price their products more or less com-petitively because of the ease of entry by outsiders. The key aspect of a conte






46. 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.






47. A feature of futures markets in which futures prices provide valuable information about the price of the underlying asset.






48. A merger or acquisition in which target shareholders are to receive shares of the acquirer's common stock as compensation.






49. The operational flexibility to alter production when demand varies from fore-cast. For example - if demand is strong - a company may profit from employees working overtime or from adding additional shifts.






50. An approach to decomposing return on investment - e.g. - return on equity - as the product of other financial ratios.






Can you answer 50 questions in 15 minutes?



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