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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. Private equity investors in development-stage companies.






2. Describes a distribution that is less peaked than the normal distribution.






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






4. CMT swap A swap in which the floating rate is the rate on a security known as a constant maturity treasury or CMT security.






5. The unsold units of product on hand.






6. Accounting in which some income items are reported as part of stockholders' equity rather than as gains and losses on the income statement; certain items of comprehensive income bypass the income statement and appear as direct adjustments to sharehol






7. The rule that - on the average - with no change in technology - a 1 percent increase in capital per hour of labor brings a 1/3 percent increase in labor productivity.






8. The mix of a company's variable costsand fixed costs.






9. A rule that states that the number of years it takes for the level of a variable to double is approximately 70 divided by the annual percent-age growth rate of the variable.






10. The error of rejecting a true null hypothesis.






11. A variation of a forward contract that has essentially the same basic definition but with some additional features - such as a clearing-house guarantee against credit losses - a daily settlement of gains and losses - and an organized electronic or fl






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






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






14. The ratio of the market value of debt and equity to the replacement cost of total assets.

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15. The stage of growth between the growth phase and the mature phase of a company in which earnings growth typically slows.






16. A rule explaining the expected value of a random vari-able in terms of expected values of the random variable conditional on mutually exclusive and exhaustive scenarios.






17. Probabilities that generally do not vary from person to person; includes a pri-ori and objective probabilities.






18. The ratio of gross profi t to revenues.






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






20. Quantiles that divide a distribution into 100 equal parts.






21. Time thought of as advancing in extremely small increments.






22. With reference to assets - the amount of cash or cash equivalents that could currently be obtained by sell ing the asset i an orderly disposal; with reference to lia-bilities - the undiscounted amount of cash or cash equivalents expected to be paid t






23. A money measure of the goods and services produced within a country's borders over a stated time period.






24. In reference to corporate taxes - a system that imputes - or attributes - taxes at only one level of taxation. For countries using an imputation tax system - taxes on dividends are effectively levied only at the shareholder rate. Taxes are paid at th






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






26. Factors that affect the average returns of a large number of different assets.






27. 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.






28. 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.






29. The relative price of foreign-made goods and services to U.S. -made goods and services.






30. Aka 'Residual income. '






31. Uncorrelated; at a right angle.






32. A transaction executed inthe foreign exchange market in which a currencyis purchased (sold) and a forward contract is sold(purchased) to lock in the exchange rate forfuture delivery of the currency. This transactionshould earn the risk-free rate of t






33. The average squared deviation below a target value.






34. A financial statement that reconciles beginning-of-period and end-of-period balance sheet values of cash; consists of three parts: cash flows from oper-ating activities - cash flows from investing activities - and cash flows from financing activities






35. The part of the execution step of the portfolio management process that involves the implementation of port-folio decisions by trading desks.






36. 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






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






38. A model of intrinsic value that views the value of an asset as the present value of the asset's expected future cash flows.






39. Short-term obligations - such as accounts payable - wages payable - or accrued liabil-ities - that are expected to be settled in the near future - typically one year or less.






40. With reference to regression analysis - the estimated values of the population intercept and population slope coeffi-cien t(s) in a regression.






41. A value at or below which a stated fraction of the data lies.






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






43. Residual income after the forecast horizon.






44. The loss in the value of an option resulting from movement of the option price toward its payoff value as the expiration day approaches.






45. The risk associated with operating earnings. Operating earnings are uncertain because total revenues and many of the expendi-tures contributed to produce those revenues are uncertain.






46. The expected value (the probability-weighted average) of squared deviations from a random variable's expected value.






47. A sample measure of the degree of dispersion of a distribution - calculated by dividing the sum of the squared deviations from the sam-ple mean by the sample size minus 1.






48. The use of computer networks to conduct financial transactions electronically.






49. With reference to regression - the set of variables included in the regression and the regression equation's functional form.






50. Long-term assets with physical sub-stance that are used in company operations - such as land (property) - plant - and equipment.