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NEW QUESTION: 1
The VaR of a portfolio at the 99% confidence level is $250,000 when mean return is assumed to be zero. If the assumption of zero returns is changed to an assumption of returns of $10,000, what is the revised VaR?
A. 0
B. 1
C. 2
D. 3
Answer: D
Explanation:
Explanation
The exact formula for VaR is = -(Z + ), where Z is the z-multiple for the desired confidence level, and is the mean return. Now Z is always a negative number, or at least will certainly be provided the desired confidence level is greater than 50%, and is often assumed to be zero because generally for the short time periods for which market risk VaR is calculated, its value is very close to zero.
Therefore in practice the formula for VaR just becomes -Z, and since Z is always negative, we normally just multiply the Z factor without the negative sign with the standard deviation to get the VaR.
For this question, there are two ways to get the answer. If we use the formula, we know that -Z= 250,000 (as
=0), and therefore -Z - = 250,000 - 10,000 = $240,000.
The other, easier way to think about this is that if the mean changes, then the distribution's shape stays exactly the same, and the entire distribution shifts to the right by $10,000 as the mean moves up by $10,000. Therefore the VaR cutoff, which was previously at -250,000 on the graph also moves up by 10k to -240,000, and therefore $240,000 is the correct answer.
The other choices are intended to confuse by multiplying the z-factor for the 99% confidence level with
10,000 etc.
NEW QUESTION: 2
Splunk automatically determines the source type for major data types.
A. True
B. False
Answer: A
NEW QUESTION: 3
You have been asked to install and configure a new switch in a customer network. Use the console access to the existing and new switches to configure and verify correct device configuration.
Examine the VTP configuration. You are required to configure private VLANs for a new server deployment connecting to the SW4 switch. Which of the following configuration steps will allow creating private VLANs?
A. Disable VTP pruning on SW1 only
B. Disable VTP pruning on SW4 only
C. Disable VTP pruning on New_Switch and SW4 only.
D. Disable VTP pruning on SW2, SW4 and New_Switch
E. Disable VTP pruning on SW2 only
Answer: B
Explanation:
To create private VLANs, you will need to only disable pruning on the switch that contains the private VLANs. In this case, only SW4 will connect to servers in a private VLAN.
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