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NEW QUESTION: 1
Which of the following situations are not suitable for applying parametric VaR:
I. Where the portfolio's valuation is linearly dependent upon risk factors II. Where the portfolio consists of non-linear products such as options and large moves are involved III. Where the returns of risk factors are known to be not normally distributed
A. All of the above
B. I and II
C. II and III
D. I and III
Answer: C
Explanation:
Explanation
Parametric VaR relies upon reducing a portfolio's positions to risk factors, and estimating the first order changes in portfolio values from each of the risk factors. This is called the delta approximation approach. Risk factors include stock index values, or the PV01 for interest rate products, or volatility for options. This approach can be quite accurate and computationally efficient if the portfolio comprises products whose value behaves linearly to changes in risk factors. This includes long and short positions in equities, commodities and the like.
However, where non-linear products such as options are involved and large moves in the risk factors are anticipated, a delta approximation based valuation may not give accurate results, and the VaR may be misstated. Therefore in such situations parametric VaR is not advised (unless it is extended to include second and third level sensitivities which can bring its own share of problems).
Parametric VaR also assumes that the returns of risk factors are normally distributed - an assumption that is violated in times of market stress. So if it is known that the risk factor returns are not normally distributed, it is not advisable to use parametric VaR.
NEW QUESTION: 2
A View administrator is preparing to configure an installation for smart card authentication.
Which two tasks must the View administrator coordinate with the Active Directory administrator and the local Certificate Authority administrator? (Choose two.)
A. adding user principal names to the Active Directory accounts of smart card users
B. adding a root certificate from the Certificate Authority to the Trusted Root Certification Authorities group policy in Active Directory
C. issuing a root certificate from the Certificate Authority to install on all the client machines that will host the View Client
D. adding users to the Remote Users group policy in Active Directory
Answer: A,B
NEW QUESTION: 3
You are playing around with setting up stacks using JSON templates in CloudFormation to try and understand them a little better. You have set up about 5 or 6 but now start to wonder if you are being charged for these stacks. What is AWS's billing policy regarding stack resources?
A. You are charged for the stack resources for the time they were operating (even if you deleted the stack right away)
B. You are not charged for the stack resources if they are not taking any traffic.
C. You are charged for the stack resources for the time they were operating (but not if you deleted the stack within 60 minutes)
D. You are charged for the stack resources for the time they were operating (but not if you deleted the stack within 30 minutes)
Answer: A
Explanation:
A stack is a collection of AWS resources that you can manage as a single unit. In other words, you can create, update, or delete a collection of resources by creating, updating, or deleting stacks. All the resources in a stack are defined by the stack's AWS CloudFormation template. A stack, for instance, can include all the resources required to run a web application, such as a web server, a database, and networking rules. If you no longer require that web application, you can simply delete the stack, and all of its related resources are deleted.
You are charged for the stack resources for the time they were operating (even if you deleted the stack right away).
Reference: http://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/stacks.html
NEW QUESTION: 4
LDP uses Initialization message to negotiate LDP parameters with the peer.
A. True
B. False
Answer: A
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