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NEW QUESTION: 1
Pace Insurance is a large, multi-line insurance company that also owns several proprietary mutual funds.
The funds are managed individually, but Pace has an investment committee that oversees all of the funds.
This committee is responsible for evaluating the performance of the funds relative to appropriate benchmarks and relative to the stated investment objectives of each individual fund. During a recent investment committee meeting, the poor performance of Pace's equity mutual funds was discussed. In particular, the inability of the portfolio managers to outperform their benchmarks was highlighted. The net conclusion of the committee was to review the performance of the manager responsible for each fund and dismiss those managers whose performance had lagged substantially behind the appropriate benchmark.
The fund with the worst relative performance is the Pace Mid-Cap Fund, which invests in stocks with a capitalization between S40 billion and $80 billion. A review of the operations of the fund found the following:
* The turnover of the fund was almost double that of other similar style mutual funds.
* The fund's portfolio manager solicited input from her entire staff prior to making any decision to sell an existing holding.
* The beta of the Pace Mid-Cap Fund's portfolio was 60% higher than the beta of other similar style mutual funds.
* No stock is considered for purchase in the Mid-Cap Fund unless the portfolio manager has 15 years of financial information on that company, plus independent research reports from at least three different analysts.
* The portfolio manager refuses to increase her technology sector weighting because of past losses the fund incurred in the sector.
* The portfolio manager sold all the fund's energy stocks as the price per barrel of oil rose above $80. She expects oil prices to fall back to the $40 to S50 per barrel range.
A committee member made the following two comments:
Comment 1: "One reason for the poor recent performance of the Mid-Cap Mutual Fund is that the portfolio lacks recognizable companies. I believe that good companies make good investments." Comment 2: "The portfolio manager of the Mid-Cap Mutual Fund refuses to acknowledge her mistakes.
She seems to sell stocks that appreciate, but hold stocks that have declined in value." The supervisor of the Mid-Cap Mutual Fund portfolio manager made the following statements:
Statement 1: "The portfolio manager of the Mid-Cap Mutual Fund has engaged in quarter-end window dressing to make her portfolio look better to investors. The portfolio manager's action is a behavioral trait known as over-reaction." Statement 2: "Each time the portfolio manager of the Mid-Cap Mutual fund trades a stock, she executes the trade by buying or selling one-third of the position at a time, with the trades spread over three months.
The portfolio manager's action is a behavioral trait known as anchoring." Indicate whether Statement 1 and Statement 2 made by the supervisor are correct.
A. Only Statement 1 is correct.
B. Neither Statement is correct.
C. Only Statement 2 is correct.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Statement 1 is incorrect. The behavioral trait is regret minimization, not overreaction. The concept of regret minimization leads to herding behavior. Window dressing is a herding mentality in which portfolio managers show investors that they only invest in stocks that outperform (winners) and avoid poor performing stocks (losers). The overreaction concept asserts that random events can greatly influence an investor's decision making.
Statement 2 is incorrect. The trading described is similar to dollar cost averaging, which is a framing dependence issue that mitigates loss aversion. Anchoring leads to an under-reaction to new information, which does not apply to the portfolio manager's trading strategy. (Study Session 3, LOS 8.a, b)

NEW QUESTION: 2
A company hosts its application in the AWS Cloud. The application runs on Amazon EC2 instances behind an Elastic Load Balancer in an Auto Scaling group and with an Amazon DynamoDB table. The company wants to ensure the application can be made available in another AWS Region with minimal downtime What should a solutions architect do to meet these requirements with the LEAST amount of downtime?
A. Create an AWS CloudFormation template to create EC2 instances and a load balancer to be executed when needed. Configure the DynamoDB table as a global table. Configure DNS failover to point to the new disaster recovery Region's load balancer.
B. Create an Auto Scaling group and a load balancer in the disaster recovery Region. Configure the DynamoDB table as a global table. Configure DNS failover to point to the new disaster recovery Region's load balancer.
C. Create an Auto Scaling group and load balancer in the disaster recovery Region. Configure the DynamoDB table as a global table Create an Amazon CloudWatch alarm to trigger an AWS Lambda function that updates Amazon Route 53 pointing to the disaster recovery load balancer.
D. Create an AWS Cloud Formation template to create EC2 instances, load balancers, and DynamoDB tables to be executed when needed. Configure DNS failover to point to the new disaster recovery Region's toad balancer.
Answer: A

NEW QUESTION: 3
Refer to exhibits.


Exhibit A shows the performance SLA exhibit B shows the SD-WAN diagnostics output.
Based on the exhibits, which statement is correct?
A. Both SD-WAN member interfaces have used separate SLA targets.
B. The SLA state of port1 is dead after five unanswered requests by the SLA servers.
C. Port1 became dead 1ecause no traffic was offload through the egress of port1.
D. SD-WAN member interfaces are affected by the SLA state of the inactive interface
Answer: B

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