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NEW QUESTION: 1
An investor holds a portfolio of mortage backed securities valued at $100m. Using a Monte Carlo based pricing model, he determines that the value of the portfolio would rise to $102m if interest rates were to fall by
45 basis points, and fall to $97m if interest rates were to rise by 45 basis points. What is the estimated modified duration of the investor's portfolio?
A. 0
B. 11.12
C. None of the above
D. 5.56
Answer: D
Explanation:
Explanation
For fixed income portfolios where standard cash flow discounting models are not available, duration calculations are based upon estimated price moves in response to a change in rates. Recall that we define duration as the percentage change in price expected for a 1% change in yield. In this case, we have three price points known to us:
Line | Price | Yield
a | $102 | r - 45bps
b | $100 | r
c | $ 97 | r + 45bps
(where r is the current yield)
The change in price from line a to line c is $102m - $97m = $5m. We use the middle point, ie $100m, to calculate the percentage change. Therefore the percentage change in price is $5m/$100m = 5%.
The change in yield between lines a and c is 90 basis points [=(r+45bps) - (r-45bps)]. In other words, the change in price is 5% for a 90 bps change in yield. So the duration can be calculated as 5/(90/100) = 5.56. The other answers are incorrect.
NEW QUESTION: 2
You need to configure a Fibre Channel device alias named TEST for a device that is attached to port fc 1/9 of a Cisco Nexus Series switch in a Cisco UCS system.
Based on the output below, which command set do you use?
Total number of flogi = 7.
A. SITE-A-MDS-Fabric-A# configure terminal
SITE-A-MDS-Fabric-A (config)# device-alias database
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias name TEST pwwn
50:00:14:42:d0:0c:f5:20
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias commit
B. SITE-A-MDS-Fabric-A# configure terminal
SITE-A-MDS-Fabric-A (config)# device-alias database
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias name TEST pwwn
50:00:14:42:d0:0c:f5:20
SITE-A-MDS-Fabric-A (config-device-alias-db)# exit
C. SITE-A-MDS-Fabric-A# configure terminal
SITE-A-MDS-Fabric-A (config)# device-alias database
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias name TEST pwwn
50:00:14:40:47:b0:0c:f5
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias commit
D. SITE-A-MDS-Fabric-A# device-alias database
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias name TEST pwwn
50:00:14:40:47:b0:0c:f5
SITE-A-MDS-Fabric-A (config-device-alias-db)# device-alias commit
Answer: B
NEW QUESTION: 3
You are configuring a BGP signaled Layer 2 VPN across your MPLS enabled core network.
In this scenario, which statement is correct?
A. This type of VPN requires the support of the I2vpn signaling NLRI on all route reflectors and participating PE devices.
B. You must ensure that all interfaces within the site's configuration are explicitly defined with their remote site identifier values.
C. You must use a unique route distinguisher value on all PE devices in your environment.
D. This type of VPN is only supported over LSPs that are using traffic-engineering.
Answer: A
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