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






2. The actual amount paid for income taxes in the period; not a provision - but the actual cash outflow.






3. A wholly-owned sub-sidiary of a company that is established to provide financing of the sales of the parent company.






4. With reference to statistical inference - astatement about one or more populations.






5. Another term for the historical method of estimating VAR. This term is somewhat misleading in that the method involves not a simulation of the past butrather what actually happened in the past - some-times adjusted to reflect the fact that a differen






6. The value to a specific buyer - tak-ing account of potential synergies based on the investor's requirements and expectations.






7. The difference between reported net income on an accrual basis and the cash flows from operating and investing activities.






8. The principle that dol-lar amounts indexed at the same point in time are additive.






9. The discount possibly applied by the market to the stock of a company operating in multiple - unrelated businesses.






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






11. FRA A contract in which the initial value is intentionally set at a value other than zero and therefore requires a cash payment at the start from one party to the other.






12. The elimination or phasing out of reg-ulations on economic activity.






13. The seller of a derivative contract. Also refers to the position of being short a derivative.






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






15. A financial statement that reconciles beginning-of-period and end-of-period balance sheet values of cash; provides information about an entity's cash inflows and cash outflows as they pertain to oper-ating - investing - and financing activities.






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






17. The ratio of a stock's market price to some m asure of va ue per share.






18. With reference to the presenta-tion of expenses in an income statement - the grouping together of expenses by similar nature - e.g. - all depreciation expenses.






19. The lowest possible value of an option.






20. An arrangement whereby a customer authorizes a debit to a demand account; typically used by companies to collect routine pay-ments for services.






21. 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






22. An amount or percentage deducted from the value of an owner-ship interest to reflect the relative absence ofmarketability.






23. An acquisition in which the acquirer purchases the target company's assets and pay-ment is made directly to the target company.






24. The amount of funds originally invested in a project or instrument; the face value to be paid at maturity.






25. With reference to statisti. cal inference - the subdivision dealing with estimating the value of a population parameter.






26. 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






27. (Aka forward rate agreement)






28. Assets that are expected to be consumed or converted into cash in the near future - typically one year or less.






29. Cash and investments (specifi-cally cash - cash equivalents - and short-term investments) .






30. Cash-settled for-ward contracts - used predominately with respect to foreign exchange forwards.






31. An intangible that can beacquired singly and is typically linked to specificrights or privileges having finite benefit periods(e.g. - a patent or trademark).






32. Amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise).






33. An option to enter into a swap.






34. Sales minus the cost of sales ~.e . - the cost of goods sold for a manufactur-ing cOlp pany) .






35. The relationship of the quantity of an asset being hedged to the quantity of the deriva-tive used for hedging.






36. A dollar deposited outside the United States.






37. Assets that are expected to bene-fit the company over an extended period of time (usually more than one year).






38. The internal rate of return on a portfol io - taking account of all cash flows.






39. Momentum indicators based on price.






40. The capital structure at which the value of the company is maximized.






41. The date on which the parties to a swap make payments.






42. A method of identifying the basic elements of the overall capitalization rate.






43. Assets lacking physical substance - such as patents and trademarks.






44. The strongest form of short-term bank borrowing facilities; they are in effect for multiple years (e.g. - 3-5 years) and may have optional medium-term loan features.






45. A multivariate classification technique used to discriminate between groups - such as companies that either will or will not become bankrupt during some time frame.






46. The first in - first out - method of accounting for inventory - which matches sales against the costs of items of inventory in the order in which they were placed in inventory.






47. A merger involving the pur-chase of a target that is farther along the value or production chain; for example - to acquire a distributor.






48. 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.






49. The risk associated with the uncer-tainty of how derivative transactions will be regu-lated or with changes in regulations.






50. A dividend payout pol-icy under which earnings in excess of the funds necessary to finance the equity portion of com-pany's capital budget are paid out in dividends.