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NEW QUESTION: 1
Click the Exhibit button.
Which pair of groups should you use to insert multiple records into the database in a single transaction?
A. 0
B. 1
C. 2
D. 3
E. 4
F. 5
Answer: E
NEW QUESTION: 2
Refer to the exhibit. When Bob dials extension 5000, which phone will ring?
A. Phone C
B. Phone D
C. Phone B
D. Phone A
Answer: D
NEW QUESTION: 3
Mike Diffle has been asked to evaluate the bonds of Hardin, Inc. The specific issue Diffle is considering has an 8% annual coupon and matures in two years. The bonds are currently callable at 101, and beginning in six months, they are callable at par. Bratton Corp, a competitor of Hardin's, also has bonds outstanding which are identical to Hardin's except that they are not callable. Diffle believes that the AA rating of both bonds is an accurate reflection of their credit risk. Diffle is wondering if the Bratton bonds might be a better investment than the Hardin bonds. Assume that the following 1-year interest rate tree is used to value bonds with a maturity of up to three years (this tree assumes interest rate volatility of 10%).
Also, assume that the appropriate spot rates for securities maturing in one, two, and three years are 7.25%
,7.5%, and 7.80%, respectively.
Diffle believes he should begin his analysis with the option-free Bratton bonds. He decides to consider two different approaches to valuing the Bratton Bonds-one that uses the current spot rate curve and another that uses the interest rate tree given above.
For the next step in his analysis, Diffle has decided to calculate the value of the Hardin bonds using the interest rate tree. His assumption is that the bond will be called ai any node of the tree where the calculated value exceeds the call price. Diffle summarizes the results of his bond valuation analysis in a memo to his supervisor, Luke Puldo. In this memo, Diffle makes the following statements:
Statement 1: The value of the option embedded in the Hardin bonds can be derived by simply subtracting the interest rate tree value of the Hardin bonds from the interest rate tree value of the Bratton bonds.
Statement 2: I am concerned that the 10% volatility assumption used to develop the interest rate tree might be too low. A higher volatility assumption would result in a lower value for the Hardin bonds.
After reviewing Diffle's analysis, Puldo notes that Diffle has not included any information on the option adjusted spread (OAS) for the Hardin bonds. Puldo suggests that Diffle should evaluate the OAS in order to get an idea of the liquidity risk of the Hardin bonds. Diffle counters that the OAS may not be very informative in this case, since he is uncertain as to the reliability of the interest rate volatility assumption.
To finish his analysis, Diffle would like to use his binomial model to evaluate the interest rate risk of both the Hardin bonds and the Bratton bonds. Diffle has shocked interest rates by 25 basis points throughout the interest rate tree he has been using to value the two bond issues. Using the new rates, Diffle has calculated values for the bonds assuming a 25-basis-point increase or decrease in rates. He plans to use these values as inputs into the following formulas for duration and convexity:
Which of the following statements is most accurate regarding Diffle's calculation of duration and convexity?
A. The duration estimate for the Bratton bonds will reflect the projected percentage change in price for a
100-basis-point change in interest rates.
B. The duration estimate will be inaccurate since it does not account for any change in cash flows due to the call option embedded in the Hardin bond.
C. The estimates for both duration and convexity will be inaccurate because the Ay term includes the OAS.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The duration formula given will calculate the percentage change in price for a 100 basis point change in yield, regardless of the actual change in rates used to derive BV_ and BV#. Using the binomial model, the derived values of BV and BV# will take into account any potential change in cash flows due to embedded options. (Study Session 14, LOS 54.h)
NEW QUESTION: 4
Which of the following ports should be opened on a firewall to allow for NetBIOS communication? (Select TWO).
A. 0
B. 1
C. 2
D. 3
E. 4
F. 5
Answer: A,C
Explanation:
Explanation: NetBIOS provides four distinct services:
Name service for name registration and resolution (port: 137/udp)
Name service for name registration and resolution (port: 137/tcp)
Datagram distribution service for connectionless communication (port: 138/udp) Session service for connection-oriented communication (port: 139/tcp)
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