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






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






3. A model for pricing options in which the underlying price can move to only one of two possible new prices.






4. With reference to fundamental factor models - the value of the attribute for an asset minus the average value of the attribute across all stocks - divided by the standard deviation of the attribute across all stocks.






5. The portion of an entity's income that is subject to income taxes under the tax laws of its jurisdiction.






6. 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






7. 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.






8. The after-tax net operating profits as a percent of total assets or capital.






9. An offset to accounts receivable for the amount of accounts receivable that are estimated to be uncollectible.






10. The risk that a financial instrument cannot be purchased or sold without a significant concession in price due to the size of the market.






11. A descriptive measure computed from or used to describe a population of data - convention-ally represented by Greek letters.






12. Securities held by banks or other financial intermediaries for trading purposes.






13. As an approach to valuing a company - the sum of the value of the company - assuming no use of debt - and the net present value of any effects of debt on company value.






14. The dollar amount of cash divi-dends paid during a period per share of common stock.






15. Bias that may result when failed or defunct companies are excluded from member-ship in a group.






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






17. In the context of inventory management - the need for inventory as part of the routine production-sales cycle.






18. Ratios that measure a company's ability to meet its long-term obligations.






19. A process used in a deliverable forward contract in which the long pays the agreed-upon price to the short - which in turn delivers the underlying asset to the long.






20. Arrangements that do not result in additional liabilities on the balance sheet but nonetheless create economic obligations.






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






22. The risk associated with accounting standards that vary from country to country or with any uncertainty about how certain transac-tions should be recorded.






23. PIE PI Es based on normalized EPS data.






24. The party obtaining the use of an asset through a lease.






25. Options that are far out-of-the-money.






26. 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.






27. The sum of the sample observations - divided by the sampfe size.






28. A swap in which the payments are basedon the difference between interest rates in twocountries but payments are made in only a singlecurrency.






29. The expected excess return on the market over the risk-free rate.






30. When a company has a single risk management group that monitors and controls all of the risk-taking activities of the organization.






31. Each component put option in a floor.






32. A method of account-ing for joint ventures where the venturer's share of the assets - liabilities - income and expenses of the joint venture are combined on a line-by-line basis with similar items on the venturer's financial statements.






33. An option in which the underlying value equals the exercise price.






34. Not due to be consumed - converted into cash - or settled within one year after the bal-ance sheet date.






35. The amount the company estimates that it can sell the asset for at the end of its useful life.






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






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






38. The study of how data can besummarized effectively.






39. Asset allocation in which the invest-ment in the market is increased if one forecasts that the market will outperform T-bills.






40. An offset to revenue reflecting any cash refunds - credits on account - and discounts from sales prices given to cus-tomers who purchased defective or unsatisfactory items.






41. A random variable for which the range of possible outcomes is the real line (all real numbers between (-00 and +(0) or some subset of the real line.






42. The net amount of cash provided from operating activities.






43. The goods and services that we sell to peo-ple in other countries.






44. The remaining (undepreciated) bal-ance of an asset's purchase cost. For liabilities - the face value of a bond minus any unamortized dis-count - or plus any unamortized premium.






45. To reduce the value of a future payment in allowance for how far away it is in time; to calcu-late the present value of some future amount. Also - the amount by which an instrument is priced below its face value.






46. The initial issuance ofcommon stock registered for public trading by a formerly private corporation.






47. The operational flexibility to adjust prices when demand varies from forecast. For example - when demand exceeds capacity - the company could benefit from the excess demand by increasing prices.






48. The cost to a com pany of issu-ing preferred stock; the dividend yield that a com-pany must commit to pay preferred stockholders.






49. The rate at which an option's time value decays.






50. Income rate that reflects the relationship between equity income and equity capital.