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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. Costs of research and development in progress atan acquired company; often - part of the purchaseprice of an acquired company is allocated to suchcosts.






2. The particular value calculated from sam-ple observations using an estimator.






3. A time series regressed on its own past values - in which the independent vari-able is a lagged value of the dependent variable.






4. The extent to which a company can effect - through the use of debt - a propor-tional change in the re turn on common equity that is greater than a given proportional change in operating income; also - short for the financial leverage ratio.






5. Any departure of the market price of an asset from the asset's estimated intrinsic value.






6. Depreciatiolil methods that allocate a relatively large proportion of the cost of an asset to the early years of the asset's useful life.






7. An agreement allowing the lessee to use some asset for a period of time; essentially a rental.






8. A record of foreign investment in a country minus its investment abroad.






9. An option to enter into a swap.






10. A payment system in which cus-tomer payments are mailed to a post office box and the banking institution retrieves and deposits these payments several times a day - enabling the company to hav use of the fund sooner than in a centralized system in wh






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






12. The first date that a share trades without (i.e. - 'ex') the dividend.






13. Is Derivatives in which the payoffs occur if a specific event occurs; generally referred to as options.






14. A measurement scale that not only ranks data but also gives assurance that the differ-ences between scale values are equal.






15. A model that specifies an asset's intrinsic value.






16. Costs borne by owners to moni tor the management of the company (e.g. - board of director expenses).






17. The difference between revenue and expenses; what remains after subtracting all expenses (including depreciation - interest - and taxes) from revenue.






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






19. A market index portfolio.






20. For data grouped into intervals - the fraction of total observations that are less than the value of the upper limit of a stated interval.






21. Serial correlation in which a positive error for one observation increases the chance of a positive error for another observation - and a negative error for one observation increases the chance of a negative error for another observation.






22. A conventional cash flow pattern is one with an ini tial outflow followed by a series of in ows.






23. A statistical model used to clas-sifY borrowers according to creditworthiness.






24. A measure of an option-free bond's aver-age maturity. Specifically - the weighted average maturity of all future cash flows paid by a security - in which the weights are the present value of these cash flows as a fraction of the bond's price. A measu






25. A value against which a computed test statistic is compared to decide whether to reject or not reject the null hypothesis.






26. 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






27. The granting of stock options to employees as a form of compensation.






28. A subset of a larger popula-tion created in such a way that each element of the population has an equal probability of being selected to the subset.






29. An inter-national agreement signed in 1947 to reduce tar-iffs on international trade.






30. A purchase involving a buyer that would benefit from certain synergies associ-ated with owning the target firm.






31. Linear regression involv-ing two or more independent variables.






32. With reference to the error term of a regression - having a variance that differs across observations.






33. A method for updating probabilities based on new information.

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34. A solvency ratio calculated as total debt divided by total shareholders' equity.






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






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






37. An approach to portfolio analysis using expected means - variances - and covariances of asset returns.






38. Managers who hold portfolios that differ from their benchmark port-folio in an attempt to produce positive risk-adjusted returns.






39. The price multiple for a stock assumed to hold at a stated future time.






40. An Activity ratio calculated as total revenue divided by average net fixed assets.






41. All changes in equity other than contributions by - and distributions to - own-ers; income under clean surplus accounting; includes all changes in equity during a period except those resulting from investments by own-ers and distributions to owners;






42. A breakdown of accounts into cate-gories of days outstanding.






43. EPS) Netincome - minus preferred dividends - divided bythe number of common shares outstanding con-sidering all dilutive securities (e.g. - convertibledebt and options); the EPS that would result if alldilutive securities were converted into commonsh






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






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






46. Deliberate activity aimed at influencing reporting earnings numbers - often with the goal of placing management in a favorable light; the opportunistic use of accruals to manage earnings.






47. A distribution that specifies the probabilities for a single random variable.






48. 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






49. Uncorrelated; at a right angle.






50. Revenue after adjustments (e.g. - for estimated returns or for amounts unlikely to be collected).







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