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CFA Level 2 Glossary
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The CFA Level II exam consists of 22 item sets comprised of vignettes with 88 accompanying multiple-choice questions.
Duration: The CFA Level II exam will be 4 hours and 24 minutes, split into two equal sessions of 2 hours and 12 minutes, with an optional break in-between.

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CFA Level 2 Topics & Weightage in 2022:
Ethics 10-15%​
Quantitative Methods 5-10%
Economics 5-10%
Financial Reporting & Analysis 10-15%
Corporate Finance 5-10%
Equity 10-15%
Fixed Income 10-15%
Derivatives 5-10%
Alternative Investments 5-10%
Portfolio Management 10-15%

CFA Level 2 Glossary
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25 Questions

1. An opportunity to conduct an arbitrage; an opportunity to earn an expected positive net profit without risk and with no net investment of money.

2. The value of exports of goods and ser-vices minus the value of imports of goods and services.

3. An average in which each observation is weighted by an index of its relative importance.

4. An increment or premium to value associated with a controlling ownership interest in a company.

5. 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.

6. The margin requirementon the first day of a transaction as well as on anyday in which additional margin funds must be deposited.

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

8. The price for immediate purchase of the underlying asset.

9. A method of identifying the basic elements of the overall capitalization rate.

10. The estimation of an unknown value on the basis of two known values that bracket it - using a straight line between the two known values.

11. Nonconvertible - noncallable preferred stock with a specified divi-dend rate that has a claim on earnings senior to the claim of common stock - and no maturity date.

12. Individuals or companies b hat execute fu tures transactions for other parties off the exchange.

13. A type of finance lease - from a lessor perspective - where the present value of the lease payments (lease receivable) exceeds the carrying value of the leased asset. The revenues earned by the lessor are operating (the profit on the sale) and financ

14. A type of weighted mean computed by averaging the reciprocals of the ohservations - then taking the reciprocal of that average.

15. The perceived ability of the bor-rower to pay what is owed on the borrowing in a timely manner; it represents the ability of a com-pany to withstand adverse impacts on its cash flows.

16. 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.

17. A long-term pattern of movement in a partic-ular direction.

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

19. A prof -itabili ty ratio calculated as operating income (i.e. - income before inte est and taxes) divided by revenue.

20. An active investment strategy that includes intentional matching of the timing of cash outflows with investment maturities.

21. A test that is not concerned with a parameter - or that makes minimal assumptions about the population from which a sam Ie comes.

22. The strategy of using futures contracts to enter the market without an immediate outlay of cash.

23. An obligation that is expected to be settled - with the outflow of resources embody-ing economic benefits - over a future period gen-erally greater than one year.

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

25. The principle that dol-lar amounts indexed at the same point in time are additive.

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