CFA Program - Acronym Guidelines for Level II
Going forward, we would like to have candidates informed that we will not define the following acronyms in Level II CFA examination questions.


Currency/Economics
EUR = Euro
GBP = British pound
JPY = Japanese yen
USD = US dollar
PPP = Purchasing Power Parity
GDP = Gross Domestic Product


Financial Reporting and Analysis
FIFO = First-In, First-Out
LIFO = Last-In, First-Out
IFRS = International Financial Reporting Standards
US GAAP = US Generally Accepted Accounting Principles
COGS = Cost of Goods Sold
PP&E (or PPE) = Property, Plant, & Equipment
SG&A = Selling, General, & Administrative
Corporate Finance
IRR = Internal Rate of Return
NPV = Net Present Value


Valuation
D/E = Debt-to-Equity ratio
DCF = Discounted Cash Flow
DDM = Dividend Discount Model
EBIT = Earnings Before Interest and Taxes
EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization
EPS = Earnings per Share
EV = Enterprise Value
FCFE = Free Cash Flow to Equity
FCFF = Free Cash Flow to the Firm
P/B ratio = Price-to-Book ratio
P/E ratio = Price-to-Earnings ratio
PEG ratio = P/E to growth ratio
ROE = Return On Equity
WACC = Weighted Average Cost of Capital


Assets: Fixed Income/Derivatives/Equity/Alternatives
bps = Basis Points
ABS = Asset-backed Security
CDO = Collateralized Debt Obligation
CDS = Credit Default Swap
CMO = Collateralized Mortgage Obligation
ETF = Exchange-traded Fund
IPO = Initial Public Offering
Libor = London Interbank Offered Rate
MBS = Mortgage-backed Security
NAV = Net Asset Value
OAS = Option Adjusted Spread
REIT = Real Estate Investment Trust
YTM = Yield to Maturity


Portfolio Management
CAPM = Capital Asset Pricing Model
CML = Capital Market Line
IPS = Investment Policy Statement
VaR = Value at Risk


Miscellaneous
n/a = not applicable