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. An estimate of the average time that elapses between paying suppliers for materi-als and collecting cash from the subsequent sale of goods produced.






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






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






4. The owner of an asset that grants the right to use the asset to another party.






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






6. The rate demanded by purchasers of bonds - given the risks associated with future cash payment obligations of the particular bond issue.






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






8. Systems that capture transaction data at the physical location in which the sale is made.






9. A theory pertaining to a company's optimal capital struc-ture; the optimal level of debt is found at the point where additional debt would cause the costs of financial distress to increase by a greater amount than the benefit of the additional tax sh






10. 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.






11. A trader who offers to buy or sell futures contracts - holding the position for only a brief period of time. Scalpers attempt to profit by buy-ing at the bid price and selling at the higher ask price.






12. Aka 'Market efficiency.






13. An option strategy in which a position in an asset is converted to a risk-free position with a position in a specific number of options. The number of options per unit of the underlying changes through time - and the position must be revised to maint






14. The risk that environmental - social - or governance risk fac tors will result in significant costs or other losses to a company and its share-holders; the risk arising from a company's obliga-tion to meet required payments under its financ-ing agree






15. Uncertainty with respect to the quantity of goods and services that a company is able to sell and the price it is able to achieve; the risk related to the uncertainty of revenues.






16. A matrix or square array whoseentries are covariances; also known as a variance-covariance matrix.






17. A stage of growth in which the com-pany reaches an equilibrium in which investment opportunities on average just earn their opportu-nity cost of capital.






18. A formula that expresses the equivalence or parity of spot and forward rates - after adjusting for differences in the interest rates.






19. Risk for which investors demand com-pensation for bearing (e.g. - equity risk - company-specific factors - macroeconomic factors).






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






21. An observation drawn from a uni-form distribution.






22. A measure of financial lever-age calculated as average total assets divided by average total equity.






23. Aka 'Residual income. '






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






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






26. The estimated gross amount of money that could be realized from the liquidation sale of an asset or assets - given a rea-sonable amount of time to find a purchaser or purchasers.






27. Diminishment in value as a result of car-rying (book) value exceeding fair value and/or recoverable value.






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






29. Earnings for a given time period - minus a deduction for common shareholders' opportunity cost in generating the earnings.






30. Management's focus on reporting earnings that meet consensus estimates.






31. Income approach that estimates the value of all intangible assets of the business by capitalizing future earnings in excess of the estimated return requirements associated with working capital and fixed assets.






32. A quantitative measure of skew (lack of symmetry); a synonym of skew.






33. Heightened uncertainty regarding a company's ability to meet its various obligations because of lower or negative earnings.






34. The annual percentage change in real CDP.






35. 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.






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






37. A form of data min-ing that applies information developed by previ-ous researchers using a dataset to guide curren t research using the same or a related dataset.






38. Plan in which the company promises to pay a certain annual amount (defined benefit) to the employee after retirement. The company bears the investment risk of the plan assets .






39. An act passed by the U.S. Con-gress in 1933 that specifies the financial and other significant information that investors must receive when securities are sold - prohibits misrepresenta-tions - and requires initial registration of all public issuance






40. The preference some investors have for shares that exhibit certain characteristics.






41. The risk attributed to the operating cost structure - in particular the use of fixed costs in operations; the risk arising from the mix of fixed and variable costs; the risk that a company's operations may be severely affected by environ-mental - soc






42. The science of describing - analyzing - and drawing conclusions from data; also - a collection of numerical data.






43. 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.






44. An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return.






45. The rate of return that must be met fora project to be accepted.






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






47. A commercial imple-mentation of the residual income concept; the computation of EVA® is the net operating profit after taxes minus the cost of capital - where these inputs are adjusted for a number of items.






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






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






50. When settling a contract - the risk that one party could be in the process of paying the counterparty while the counterparty is declar-ing bankruptcy.







Sorry!:) No result found.

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