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. Aka Liquidity discount.






2. An approach to investing thatfocuses on the individual characteristics of securi-ties rather than on macroeconomic or overall market forecasts.






3. The sale - liquidation - or spin-off of a d'vi-sion or subsidiary.






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






5. A reduction or discount to value that reflects the lack of depth of trading or liquid-ity in that asset's market.






6. In the context ofmerger analysis - it is an estimate of a target com-pany's value found by discounting the company's expected future free cash flows to the present.






7. 1) An agent who executes orders to buy orsell securities on behalf of a client in exchange for a commission. 2) See Futures commission merchants.






8. Private equity investors in development-stage companies.






9. 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






10. The sale by a foreign firm of exports at a lower price than the cost of production.






11. 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.






12. Attempts by management to encourage analysts to forecast a slightly lower number for expected earnings than the analysts would otherwise forecast.






13. A balance sheet asset that arises when an excess amount is paid for income taxes relative to accounting profit. The taxable income is higher than accounting profit and income tax payable exceeds tax expense. The company expects to recove r the differ






14. Futures contracts in which the underlying is a traditional agricultural - metal - or petroleum product.






15. A tax that is imposed by the importing coun-try when an imported good crosses its interna-tional boundary.






16. A variable used to explain the dependen t variable in a regression ; a right-hand-side variable in a regression equation .






17. Forecasted dividends per share over the next year divided by current stock price.






18. 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






19. A depreciation method that allocates evenly the cost of a long-lived asset less its estimated residual value over the estimated useful life of the asset.






20. A swap transaction in which at least one cash flow is tied to the return to an equity portfo-lio position - often an equity index.






21. An option strategy involving the purchase of two puts and one call.






22. The rate of return from a cash-and-carry transaction implied by the futures price relative to the spot price.






23. An activity ratio equal to the number of days in a period divided by the inventory ratio for the period; an indication of the number of days a company ties up funds in inventory.






24. An event or piece of information that causes the marketplace to re-evaluate the prospects of a company.






25. A swap in which the notional principal changes according to a for-mula related to changes in the underlying.






26. A type of qualitative variable that takes on a value of 1 if a particular condition is true and 0 if that condition is false.






27. Selling a product in slightly altered forms to different groups of consumers.






28. A trader who typically holds posi-tions open overnight.






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






30. With reference to investment selection processes - an approach that starts with macro selection (i.e. - identifying attractive geo-graphic segments andVor industry segments) and then addresses selection 0 the most attractive investments within those






31. A gain in value caused bychanges in price levels. Monetary liabilities expe-rience purchasing power gains during periods ofinflation.






32. A specialized computer program or a spreadsheet that solves for the portfolio weights that will result in the lowest risk for a specified level of expected return.






33. 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.






34. In reference to short-term cash management - it is an investment strategy charac-terized by simple decision rules for making daily investments.






35. A measure of goodness-of-fit of a regres-sion that is adjusted for degrees of freedom and hence does not automatically increase when another independent variable is added to a regression.






36. Costs associated with the conflict of interest present when a company is managed by non-owners. Agency costs result from the inher-ent conflicts of interest between managers and equity owners.






37. A financial instrument that gives one party the right - but not the obligation - to buy or sell an underlying asset from or to another party at a fixed price over a specific period of time. Also referred to as contingent claims.






38. With reference to portfolio strategies - the application of a strategy's portfolio selection rules to historical data to assess what would have been the strategy's historical performance.






39. The competitive strategy of being the lowest cost producer while offering products comparable to those of other firms - so that prod-ucts can be priced at or near the industry average.






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






41. A model of stock val-uation that views a stock's intrinsic value as the present value of expected future free cash flows to equity.






42. Lack of bias. A desirable property of estimators - an unbiased estimator is one whose expected value (the mean of its sampling distri-bution) equals the parameter it is intended to estimate.






43. In the context of customer receipts - the amount of money that is in transit between pay-ments made by customers and the funds that are usable by the company.






44. Assets that can be most readily con-verted to cash (e.g. - cash - short-term marketable investments - receivables) .






45. Describes two time series that have a long-term financial or economic relationship such that they do not diverge from each other without bound in the long run.






46. A principle stating that the pr:obability that A or B occurs (both occur) equals he probabili ty thab A occ rs - plus the probabir ty tha~ B occurs - minus the probabil-ity that both A and B occur.






47. A measure of disper-sion relating to a population in the same unit of measurement as the observations - calculated as the positive square root of the population variance.






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






49. A quantitative measure that describes the location or distribution of data; includes not only measures of central tendency but also other measures such as percentiles.






50. A condition in the futures markets in which a transaction cannot take place because the price would be beyond the limits.






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