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CFA Investment Foundation Program Terms
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The CFA Institute Investment Foundations Program covers the essentials of finance, ethics, and investment roles, providing a clear understanding of the global investment industry.

CFA Investment Foundation Program Terms
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25 Questions

1. An intangible asset that arises when a company purchases another company and pays more than the fair value of the net assets (assets minus liabilities) of the purchased company.

2. The situation in which, at a particular price, no buyer or seller has any incentive or desire to change the quantity demanded or supplied, all other factors remaining unchanged.

3. The risk that a financial instrument cannot be purchased or sold in a timely manner without a significant concession in price.

4. An expectation that employees will place the employer’s interests above their own and will not misappropriate a company’s property.

5. Investment professionals who help their clients set their financial goals and determine how much money they should save for future expenses and/or how much money they can spend on current expenses while still preserving their capital.

6. Places where buyers and sellers can trade securities. Also called securities markets or financial markets.

7. Markets in which brokers arrange trades among their clients, particularly for such assets as large blocks of securities or real estate that are unique and thus of interest as potential investments to only a limited number of investors.

8. Positions for which investors sell assets or securities that they do not own, a process that involves borrowing the assets or securities, selling them, and repurchasing them later to return them to their owner. These positions increase in value when prices fall.

9. The owners of shares (stock) of a corporation.

10. The risk associated with decreases in bond prices resulting from increases in interest rates.

11. Abusive trading practice that involves taking actions intended to move the price of a stock to make a short-term profit.

12. Market in which investors trade securities and contracts with each other but not with the original security issuer.

13. Principles that support and promote desired values or behaviours.

14. Bonds rated BB+ or lower by Standard & Poor’s and Fitch and Ba1 or lower by Moody’s. Also called high-yield bonds or junk bonds.

15. The relationship between the yields to maturity offered by government bonds and the maturities of these government bonds.

16. Short-term assets that are expected to be converted into cash, used up, or sold within the current operating period (usually one year), such as cash, inventories, and accounts receivable.

17. Accounting method in which revenues and related expenses are recorded when the revenues are earned and the expenses are recognised rather than when the cash is received and paid.

18. The issuance by a publicly traded company of additional common shares subsequent to the initial public offering. Also called a seasoned equity offering.

19. An economic system that promotes private ownership as the means of production and markets as the means of allocating scarce resources.

20. Activities that involve the purchase and sale of government bonds by a central bank.

21. Reflects the price changes experienced by domestic producers in a country.

22. A composite of economic indicators used to predict future economic conditions.

23. Derivatives in which two parties swap cash flows or other financial instruments over multiple periods (months or years) for mutual benefit, usually to manage risk.

24. Investment research service providers that specialise in providing opinions about the credit quality of bonds and of their issuers.

25. Prices at which a dealer is willing to buy an asset or a security, typically qualified by a maximum quantity (bid size).