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NEW QUESTION: 1
What is an advantage of running Linux on Power compared to x86 technology?
A. Chipkill memory
B. Docker containers
C. Extended Error Handling
D. Partition mobility
Answer: D
NEW QUESTION: 2
A well-known retailer has experienced a massive credit card breach. The retailer had gone through an audit and had been presented with a potential problem on their network. Vendors were authenticating directly to the retailer's AD servers, and an improper firewall rule allowed pivoting from the AD server to the DMZ where credit card servers were kept. The firewall rule was needed for an internal application that was developed, which presents risk. The retailer determined that because the vendors were required to have site to site VPN's no other security action was taken.
To prove to the retailer the monetary value of this risk, which of the following type of calculations is needed?
A. Quantitative Risk Analysis
B. Qualitative Risk Analysis
C. A cost/benefit analysis
D. Residual Risk calculation
Answer: A
Explanation:
Performing quantitative risk analysis focuses on assessing the probability of risk with a metric measurement which is usually a numerical value based on money or time.
NEW QUESTION: 3
William Rogers, a fixed-income portfolio manager, needs to eliminate a large cash position in his portfolio.
He would like to purchase some corporate bonds. Two bonds that he is evaluating are shown in Exhibit I.
These two bonds are from the same issuer, and the current call price for the callable bond is 100. Assume that the issuer will call if the bond price exceeds the call price.
Rogers is also concerned about increases in interest rates and is considering the purchase of a putable bond. He ants to determine how assumed increases or decreases in interest rate volatility affect the value of the straight bonds and bonds with embedded options. After Rogers performs some analysis, he and his supervisor, Sigourney Walters, discuss the relative price movement between the two bonds in Exhibit 1 when interest rates change significantly During the discussions, Rogers makes the following statements:
Statement 1: If the volatility of interest rates decreases, the value of the callable bond will increase.
Statement 2: The noncallable bond will not be affected by a change in the volatility or level of interest rates.
Statement 3: When interest rates decrease, the value of the noncallable bond increases by more than the callable bond.
Statement4: If the volatility of interest rates increases, the value of the putable bond will increase.
Walters mentors Rogers on bond concepts and then asks him to consider the pricing of a third bond. The third bond has five years to maturity, a 6% annual coupon, and pays interest semiannually. The bond is both callable and putable at 100 at any time. Walters indicates that the holders of the bond's embedded options will exercise if the option is in-the-money.
Rogers obtained the prices shown in Exhibit b using software that generates an interest rate lattice. He uses his software to generate the interest rate lattice shown in Exhibit 2.
Exhibit 2: Interest Rate Lattice (Annualized Interest Rates)
The market value of the embedded call option in Exhibit 1 is closest to:
A. 1.56.
B. 1.79
C. 1.65.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The answer is 1.56 and is found by taking the difference between the value of the callable and the noncallable bonds: Call option value = 99.77 - 98.21 = 1.56. Note: This is an example of a bask question that you should get right! Don't give up these points or lose time by starting a complicated calculation. The question might be as easy as it seems. (Study Session 14, LOS 54.e)