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NEW QUESTION: 1
In the Service Strategy model when considering a cloud solution, which of the following BEST
demonstrates the Analyze phase?
A. Value Proposition Prioritization
B. Service Portfolio Authorization
C. Inventories Business Case
D. Communication Resource Allocation
Answer: C
NEW QUESTION: 2
Sammy is the project manager for her organization. She would like to rate each risk based on its probability and affect on time, cost, and scope. Harry, a project team member, has never done this before and thinks Sammy is wrong to attempt this approach. Harry says that an accumulative risk score should be created, not three separate risk scores. Who is correct in this scenario?
A. Sammy is correct, because organizations can create risk scores for each objective of the project.
B. Harry is correct, because the risk probability and impact considers all objectives of the project.
C. Harry is correct, the risk probability and impact matrix is the only approach to risk assessment.
D. Sammy is correct, because she is the project manager.
Answer: A
NEW QUESTION: 3
In the case of historical volatility weighted VaR, a higher current volatility when compared to historical volatility:
A. will increase the VaR estimate
B. will decrease the VaR estimate
C. will increase the confidence interval
D. will not affect the VaR estimate
Answer: A
Explanation:
Explanation
When calculating volatility weighted VaR, returns are adjusted by a factor equal to the current volatility divided by the historical volatility, ie the volatility that existed during the time period the returns were earned.
If the current volatility is greater than the historical volatility (also called contemporary volatility), then it has the effect of increasing the magnitude of any past returns (whether positive or negative). This in turn increases the VaR.
Consider an example: if the current volatility is 2%, and a return of -5% was earned at a time when the volatility was 0.8%, then the volatility weighted return would be 12.5% (=-5% x 2%/0.8%). Clearly, this has the effect of increasing the VaR.
Choice 'd' is therefore the correct answer.
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