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NEW QUESTION: 1
William Bliss, CFA, runs a hedge fund that uses both managed futures strategies and positions in physical commodities. He is reviewing his operations and strategies to increase the return of the fund. Bliss has just hired Joseph Kanter, CFA, to help him manage the fund because he realizes that he needs to increase his trading activity in futures and to engage in futures strategies other than fully hedged, passively managed positions. Bliss also hired Kanter because of Kantcr's experience with swaps, which Bliss hopes to add to his choice of investment tools.
Bliss explains to Kanter that his clients pay 2% on assets under management and a 20% incentive fee.
The incentive fee is based on profits after having subtracted the risk-free rate, which is the fund's basic hurdle rate, and there is a high water mark provision. Bliss is hoping that Kanter can help his business because his firm did not earn an incentive fee this past year. This was the case despite the fact that, after two years of losses, the value of the fund increased 14% during the previous year. That increase occurred without any new capital contributed from clients. Bliss is optimistic about the near future because the term structure of futures prices is particularly favorable for earning higher returns from long futures positions.
Kanter says he has seen research that indicates inflation may increase in the next few years. He states this should increase the opportunity to earn a higher return in commodities and suggests taking a large, margined position in a broad commodity index. This would offer an enhanced return that would attract investors holding only stocks and bonds. Bliss mentions that not all commodity prices are positively correlated with inflation so it may be better to choose particular types of commodities in which to invest.
Furthermore, Bliss adds that commodities traditionally have not outperformed stocks and bonds either on a risk-adjusted or absolute basis. Kanter says he will research companies who do business in commodities, because buying the stock of those companies to gain commodity exposure is an efficient and effective method for gaining indirect exposure to commodities.
Bliss agrees that his fund should increase its exposure to commodities and wants Kanter's help in using swaps to gain such exposure. Bliss asks Kanter to enter into a swap with a relatively short horizon to demonstrate how a commodity swap works. Bliss notes that the futures prices of oil for six months, one year, eighteen months, and two years are $55, S54, $52, and $5 1 per barrel, respectively, and the risk- free rate is less than 2%.
Bliss asks how a seasonal component could be added to such a swap. Specifically, he asks if either the notional principal or the swap price can be higher during the reset closest to the winter season and lower for the reset period closest to the summer season. This would allow the swap to more effectively hedge a commodity like oil, which would have a higher demand in the winter than the summer. Kanter says that a swap can only have seasonal swap prices, and the notional principal must stay constanl. Thus, the solution in such a case would be to enter into two swaps, one that has an annual reset in the winter and one that has an annual reset in the summer.
Kanter's comment concerning seasonal swaps is:
A. not correct because neither swap price nor notional principal can be seasonal.
B. not correct because both a seasonal notional principal and swap price are possible.
C. not correct because it is the notional principal that can be seasonal and not the swap price.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Commodity swaps can have both seasonal prices and notional principals. This should not be surprising since swaps are OTC contracts that the participants can design any way they choose. (Study Session 13, LOS 38.a)

NEW QUESTION: 2
Which condition would cause a vCenter Server installation to fail when installing on a Windows virtual machine?
A. The virtual machine is running Windows Server 2008.
B. The virtual machine has an E1000 network device.
C. The virtual machine does not have 16GB of RAM.
D. The virtual machine does not have at least four vCPUs.
Answer: A
Explanation:
Explanation/Reference:
Explanation: The vCenter Server installation or uninstallation process might fail or stop responding on Windows Server 2008 R1 SP2
The Windows Installer on Windows Server 2008 R1 SP2 has issues with handling multiple packages.
Because of these issues the vCenter Server installation might stop responding, or if you attempt to install and uninstall vCenter Server a few times, the process might fail.
Workaround: Apply the patch from Microsoft KB 981669 which addresses the Windows Installer issue.
Reference: https://www.vmware.com/support/vsphere6/doc/vsphere-esxi-vcenter-server-60-release- notes.html#compatibility

NEW QUESTION: 3

A. Remove-MsolFederatedDomain
B. Set-MsolDirSyncEnabled
C. Update-MsolFederatedDomain
D. Remove-MsolDomain
Answer: B
Explanation:
The complete command to disable directory Sync is Set-MsolDirSyncEnabled -EnableDirSync $false http://support.microsoft.com/kb/2619062

NEW QUESTION: 4



A. Option B
B. Option A
Answer: B

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