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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. Under IFRS - the liability of a defined benefit pension.






2. The date that employees can first exer-cise stock options; vesting can be immediate or over a future period.






3. The portion of an entity's income that is subject to income taxes under the tax laws of its jurisdiction.






4. Ratio of sales on credit to the average balance in accounts receivable.






5. The incor-poration of production planning into inventory management. A MRP analysis provides both a materials acquisition schedule and a production schedule.






6. Valuation measures and other factors related to share price or the trading characteristics of the shares - such as earn-ings yield - dividend yield - and book-to-market value.






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






8. The cost of debt financing to a com-pany - such as when it issues a bond or takes out abank loan.






9. An approach to recognizing credit losses on customer receivables in which the company waits until such time as a customer has defaulted and only then recognizes the loss.






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






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






12. Assets that are expected to provide economic benefits over a future period of time - typically greater than one year.






13. The competitive strategy of seeking a compet-itive advantage within a target segment or seg-ments of the industry - either on the basis of cost leadership (cost focus) or differen tiation (differ-entiation focus) .






14. A time series in which the value ofthe series in one period is the value of the series in the previous period plus an unpredictable random error.






15. Debt or equity financial assets bought with the inten-tion to sell them in the near term - usually less than three months; securities that a company intends to trade.






16. A present value model of stock value that views the intrinsic value of a stock as present value of the stock's expected future dividends.






17. A dividend yield based on the anticipated dividend during the next 12 months.






18. The price received to sell an asset or trans-fer a liability.






19. A graph line that describes the combinations of expected return and standard deviation of return available to an investor from combining the optimal portfolio of risky assets with the risk-free asset.






20. The potential for asymmetric information to bring about a general decline in product quality in an industry.






21. The positive square root of the sample variance.






22. An inventory accounting method that averages the total cost of available inventory items over the total units avail-able for sale.






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






24. A business owned and operated by more than one individual.






25. The process of valuing long-lived assets at fair value - rather than at cost less accumulated depreciation. Any resulting profit or loss is either reported on the income statement and/or through equity under revaluation surplus.






26. The prooability of an observation - given a par ticular set of conditions.






27. With reference to the cash flow statement - a format for the presentation of the statement in which cash flow from operat-ing activities is shown as operating cash receipts less operating cash disburseme ts.






28. A variation of a floating-rate note that has some type of unusual characteristic such as a leverage factor or in which the rate moves opposite to interest rates.






29. Outflows of economic resources or increases in liabilities that result in decreases in equity (other than decreases because of distribu-tions to owners); reductions in net assets associ-ated with the creation of revenues.






30. A legal corporate entity whose shareholders are its members. The members of the exchange have the privilege of executing transactions directly on the exchange.






31. A transformation that involves sub-tracting the mean and dividing the result by the standard deviation.






32. An estimate of the average number of days it takes deposited checks to clear; average daily float divided by average daily deposit.






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






34. A diagram with branches emanating from nodes representing either mutually exclu-sive chance events or mutually exclusive decisions.






35. A merger or acquisition that is to be paid for with cash; the cash for the merger might come from the acquiring company's existing assets or from a debt issue.






36. The correlation of a time series with its own past values.






37. A ratio in property valua-tion; net operating income divided by sale price. Also known as the going-in rate.






38. A comparison of revenues with working capital to produce a measure that shows how efficiently working capital is employed.






39. A rule explaining the uncon-ditional probability of an event in terms of proba-bilities of the event conditional on mutually exclusive and exhaustive scenarios.






40. Analysis that shows the changes in key financial quantities that result from given (economic) events - such as the loss of customers - the loss of a supply source - or a catastrophic event; a risk management technique involving examina-tion of the pe






41. A measurement scale that categorizes data but does not rank them.






42. Valuation approach that values an asset as the present discounted value of the income expected from it.






43. The operational flexibility to adjust prices when demand varies from forecast. For example - when demand exceeds capacity - the company could benefit from the excess demand by increasing prices.






44. The relationship between the price of the underlying and an option's exercise price.






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






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






47. An option in which the underly-ing is an interest rate.






48. Financial statements in which all elements (accounts) are stated as a per-centage of a key figure such as revenue for an income statement or total assets for a balance sheet.






49. A profitability ratio calculated as earnings before taxes divided by revenue.






50. FIrm The cash flow available to the company's suppliers of capital after all operat-ing expenses (including taxes) have been paid and necessary investments in working and fixed capital have been made.