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NEW QUESTION: 1
Scenario
A. Option A
B. Option C
C. Option D
D. Option B
Answer: D
Explanation:
For an EIGRP neighbor to form, the following must match:
-Neighbors must be in the same subnet
-K values
-AS numbers
-Authentication method and key strings
Here, we see that R4 is configured for EIGRP AS 2, when it should be AS 1.
NEW QUESTION: 2
*Exhibit is Missing*
A. Option B
B. Option A
C. Option C
D. Option D
Answer: B
Explanation:
Explanation
By creating a direct site-link between Site1 and Site5 changes made in Site1 can be replicated in one cycle to Site5.
Reference: Active Directory Replication
https://technet.microsoft.com/en-us/library/dd277429.aspx
NEW QUESTION: 3
An asset manager is of the view that interest rates are currently high and can only decline over the coming 5 years. He has a choice of investing in the following four instruments, each of which matures in 5 years. Given his perspective, what would be the most suitable investment for the asset manager? Assume a flat yield curve.
A. A 15% coupon bond with an yield to maturity of 5%
B. A floating rate note with annual resets, with the first year's rate yielding 5%
C. A zero coupon bond with an yield to maturity of 5%
D. A 10% coupon bond with an yield to maturity of 5%
Answer: C
Explanation:
Explanation
There are two ways to think about this question: First, because the asset manager thinks that interest rates are going to decline, his profit will be maximized if he buys the bond with the greatest duration. The zero coupon bond has the greatest duration among the alternatives listed. Therefore Choice 'c' is the correct answer.
The second way to look at this question is to consider what is called 'reinvestment risk'. Yields to maturity calculations have an implicit assumption that any cash flows received prior to maturity are investible at the ytm rate. Thus, an yield to maturity calculation for a coupon bearing bond assumes that coupon payments get invested at the same rate as the calculated ytm from the time they are received till the time the bond matures.
In an environment where interest rates fall, this assumption will not hold true. Reinvestment risk is the risk that coupons will not be able to earn the ytm that the bond was brought at - and the investor will be at a loss to the extent the money does not earn the ytm rate till the end of the investment. One way to reduce reinvestment risk is to minimize coupon receipts so the money stays invested as part of the bond, and the zero coupon bond helps to do exactly that.
NEW QUESTION: 4
A. Option A
B. Option C
C. Option D
D. Option B
Answer: B,D
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