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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. A valuation ratio calculated as price per share divided by cash flow per share.






2. An adjustment used to facilitate delivery on bond futures contracts in which any of a number of bonds with different characteristics are eligible for delivery.






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






4. To sell the assets of a company - division - or subsidiary piecemeal - typically because of bank-ruptcy; the form of bankruptcy that allows for the orderly satisfaction of creditors' claims after which the company ceases to exist.






5. Debt issued with warrants that give the bondholder the right to purchase equity at prespecified terms.






6. The difference between the observed value of a statistic and the quantity it is intended to estimate.






7. The hypothesis that higher debt levels discipline managers by forcing them to make fixed debt service payments and by reducing the company's free cash flow.






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






9. A quantity - calculated based on a sam-ple - whose value is the basis for deciding whether or not to reject the null hypothesis.






10. The estimated cost of equity capital in money terms.






11. Any outcome or specified set of outcomes of a random variable.






12. The ratio of the market value of debt and equity to the replacement cost of total assets.

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13. Outflows of economic resources or increases in liabilities that result in decreases in equity (other than decreases because of distribu-tions to owners); reductions in net assets associ-ated with the creation of revenues.






14. A guarantee from the clear-inghouse that if one party makes money on a transaction - the clearinghouse ensures it will be paid.






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






16. A theory of regulatory behavior that predicts that regulators will eventually be cap-tured by special interests of the industry being regulated.






17. A portfolio having factor sensitiv-ities that are matched to those of a benchmark or other portfolio.






18. A weighted average of the after-tax required rates of return on a company's common stock - preferred stock - and long-term debt - where the weights are the fraction of each source of financing in the company's target capital structure.






19. A possible value of a random variable.






20. Unex-pected earnings per share divided by the standard deviation of unexpected earnings per share over a specified prior time period.






21. A tool that calculates the contri-bution to real CDP growth of each of its sources.






22. A swap in which the floating payments have a lower limit.






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






24. The date that employees can first exer-cise stock options; vesting can be immediate or over a future period.






25. A number between 0 and 1 describing the chance that a stated event will occur.






26. A sample measure of the degree of a distribution's peakedness in excess of the normal distribution's peakedness.






27. A variation of the market approach; establishes a value estimate based on the observed multiples from trading activity in the shares of public companies viewed as reasonably comparable to the subject private company.






28. With reference to equity investors - investors who seek to invest in high-earnings-growth companies.






29. The incor-poration of production planning into inventory management. A MRP analysis provides both a materials acquisition schedule and a production schedule.






30. The fair value of the estimated costs to be incurred at the end of a tangible asset's service life. The fair value of the liability is determined on the basis of discounted cash flows.






31. The cost of debt financing to a com-pany - such as when it issues a bond or takes out abank loan.






32. When liabilities translated at the current exchange rate are greater than assets translated at the current exchange rate. Liabilities exposed to translation gains or losses exceed the exposed assets.






33. The relationship between the price of the underlying and an option's exercise price.






34. CMT swap A swap in which the floating rate is the rate on a security known as a constant maturity treasury or CMT security.






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






36. Financial statements that are not accompanied by an auditor's opinion letter.

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37. An option strategy in which a long position in an asset is combined with a long posi-tion in a put.






38. A merger involving companies inthe same line of business - usually as competitors.






39. Resolving differences in indications of value when estimating market value.






40. A form of restructuring that involves the creation of a new legal entity and the sale of equity in it to outsiders.






41. Analysis that shows the range of possible outcomes as specific assumptions are changed.






42. A standardized measure of systematic risk based upon an asset's covariance with the market portfolio.






43. Any rate used in finding the present value of a future cash flow.






44. A measurement scale that categorizes data but does not rank them.






45. The combination of the underlying - puts - calls - and risk-free bonds that replicates a forward contract.






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






47. A diagram with branches emanating from nodes representing either mutually exclu-sive chance events or mutually exclusive decisions.






48. An international organi-zation that places greater obligations on its mem-ber countries to observe the GATT rules.






49. Analysts who work for investment management fi rms - trusts - a d bank trust depart-ments - and similar institutions.






50. A legal restriction that dividends cannot exceed retained earnings.