Finance Abbreviations — Part 2 MCQs with Explanations

Certified Management Accountant (CMA) is a professional certification credential in the management accounting and financial management fields. The certification signifies that the person possesses knowledge in the areas of financial planning, analysis, control, decision support, and professional ethics. There are many professional bodies globally that have management accounting professional qualifications.

Certified Information Systems Auditor (CISA) refers to a designation issued by the Information Systems Audit and Control Association (ISACA). The designation is the global standard for professionals who have a career in information systems, in particular, auditing, control, and security.

Certified Financial Manager (CFM) was a finance certification in financial management. The credential was earned through work experience, examination, and continuing education. The program was established by Institute of Management Accountants in June 1996, and 4,940 financial professionals earned the CFM designation.

Cash Reserve Ratio (CRR) is the share of a bank's total deposit that is mandated by the Reserve Bank of India (RBI) to be maintained with the latter as reserves in the form of liquid cash.

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company.

Basic Statistical Return (BSR) Code is a unique code assigned to each individual branch of banks by Reserve Bank of India. It consists of seven digits where first three digits represent the bank and remaining four digits represent the bank branch. It is used while filling the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) returns. BSR Code helps the bank to maintain a record of all online transactions done for tax through a bank branch. It also helps the Department of Income Tax to record the information about the payments made through a particular bank.

Asynchronous Transfer Mode (ATM) is a telecommunications standard defined for digital transmission of multiple types of traffic, including telephony (voice), data, and video signals in one network without the use of separate overlay networks. ATM was developed to meet the needs of the Broadband Integrated Services Digital Network, as defined in the late 1980s, and designed to integrate telecommunication networks.

As the name suggests, direct selling agents or the DSA are experts brought direct business to institutes. With increasing competition in the banking sector, the banks and financial companies have assigned business developers as DSAs works in the field and giving clients for the financial goods provided by the banking industry, such as loans, credit cards, etc. They are paid a fixed percentage commission on the bank's business.

ARIMA is an acronym that stands for AutoRegressive Integrated Moving Average. It is a class of model that captures a suite of different standard temporal structures in time series data. In this tutorial, you will discover how to develop an ARIMA model for time series forecasting in Python.

Annual percentage rate (APR) refers to the yearly interest generated by a sum that's charged to borrowers or paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment. This includes any fees or additional costs associated with the transaction, but it does not take compounding into account. The APR provides consumers with a bottom-line number they can compare among lenders, credit cards or investment products.

Annual financial statements are financial reports based on a 12 month consecutive time period. The most common set of financials are based on the calendar year, but they can also be based on a company's fiscal year.

An NCND, also called a non-circumvention/non-disclosure agreement, is used in the early stages of a business agreement. It is commonly used when the buyer and seller aren't familiar with each other but have been connected by a broker or middleman to make a transaction. An NCND agreement makes sure that the brokers or intermediaries aren't left out of the transaction. In other words, it is an agreement to protect the broker in case the buyer and seller want to pursue the deal but leave the broker out of it.

An individual retirement account (IRA) is a savings account with tax advantages that individuals can use to save and invest long term.

An exchange traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.

An authorized dealer is an individual or company authorized by a manufacturer to sell its products. This dealer has a franchise to represent a well-established brand and distribute its products.

An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. With an adjustable-rate mortgage, the initial interest rate is fixed for a period of time. After that, the interest rate resets periodically, at yearly or even monthly intervals.

A tax-sheltered annuity (TSA) is a retirement savings plan that allows employees of tax-exempt organizations and self-employed people to invest pretax dollars to build retirement income. Tax-sheltered annuities are designed to provide consistent payouts over time and act as a reliable source of income in retirement.

A systematic investment plan (SIP) is a plan in which investors make regular, equal payments into a mutual fund, trading account, or retirement account such as a 401(k). SIPs allow investors to save regularly with a smaller amount of money while benefiting from the long-term advantages of dollar-cost averaging (DCA).

A structured investment vehicle (SIV) is a non-bank financial institution established to earn a credit spread between the longer-term assets held in its portfolio and the shorter-term liabilities it issues. They are simple credit spread lenders, frequently "lending" by investing in securitizations, but also by investing in corporate bonds and funding by issuing commercial paper and medium term notes, which were usually rated AAA until the onset of the financial crisis.

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments without having to buy, manage, or finance any properties themselves.

A profit sharing plan is a retirement plan that gives employees a share in the profits of a company. Under this type of plan, also known as a deferred profit sharing plan (DPSP), an employee receives a percentage of a company's profits based on its quarterly or annual earnings. This is a great way for a business to give its employees a sense of ownership in the company, but there are typically restrictions as to when and how a person can withdraw these funds without penalties.

A non-disclosure agreement or NDA is a written contract between two parties (people or organisations) that prohibits the sharing of confidential information shared between both the ends.

A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. NBFC facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and market brokering. Examples of these include insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations.

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.

A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal. Commonly used in major business transactions, LOIs are similar in content to term sheets. One major difference between the two, though, is that LOIs are presented in letter formats, while term sheets are listicle in nature.

A forward rate agreement (FRA) is a cash-settled OTC contract between two counterparties, where the buyer is borrowing (and the seller is lending) a notional sum at a fixed interest rate (the FRA rate) and for a specified period of time starting at an agreed date in the future.

A foreign currency convertible bond (FCCB) is a type of convertible bond issued in a currency different than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of foreign currency. A convertible bond is a mix between a debt and equity instrument.

A chief technology officer (CTO) is the executive in charge of an organization's technological needs as well as its research and development (R&D). Also known as a chief technical officer, this individual examines the short- and long-term needs of an organization and utilizes capital to make investments designed to help the organization reach its objectives.

A Chief Marketing Officer (CMO) is responsible for overseeing the planning, development and execution of an organization's marketing and advertising initiatives. Reporting directly to the chief executive officer, the CMO's primary responsibility is to generate revenue by increasing sales through successful marketing for the entire organization, using market research, pricing, product marketing, marketing communications, advertising and public relations.

A chartered financial analyst (CFA) is a globally-recognized professional designation given by the CFA Institute, (formerly the AIMR (Association for Investment Management and Research)), that measures and certifies the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas, such as accounting, economics, ethics, money management, and security analysis.

A certified public accountant (CPA) is a designation provided to licensed accounting professionals. The CPA license is provided by the Board of Accountancy for each state. The American Institute of Certified Public Accountants (AICPA) provides resources on obtaining the license. The CPA designation helps enforce professional standards in the accounting industry.

A Certified Internal Auditor (CIA) is a certification offered to accountants who conduct internal audits. The Certified Internal Auditor designation is conferred by the Institute of Internal Auditors (IIA) and is the only such credential that is accepted worldwide.

Central Commerce India Limited is the correct answer to “What is the full form of "CCIL"”. This question is standard in competitive examination syllabi for Finance Abbreviations.

Cabinet Committee on Economic Affairs is the correct answer to “What is the full form of "CCEA"”. This question is standard in competitive examination syllabi for Finance Abbreviations.

Foreign Liabilities and Assets Survey is the correct answer to “What is the full form of "FLAS"”. This question is standard in competitive examination syllabi for Finance Abbreviations.

India Development Bonds is the correct answer to “What is the full form of "IDB"”. This question is standard in competitive examination syllabi for Finance Abbreviations.

Non-Banking Companies is the correct answer to “What is the full form of "NBC"”. This question is standard in competitive examination syllabi for Finance Abbreviations.