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NEW QUESTION: 1
How will the Macaulay duration of a 10 year coupon bearing bond change if 10 year zero rates stay the same but the yield curve changes from being flat to upward sloping?
A. Will decrease
B. Will increase
C. Will be unaffected
D. Cannot say without more information
Answer: A
Explanation:
Explanation
Since the 10 year rate has stayed the same, but the curve has gone from being flat to upward sloping, it means the shorter term interest rates have gone down. Recall that Macaulay duration is the PV of the payments received on a bond over its life weighted by the year each payment is received in. Also remember that a bond's current price is nothing but the summation of the different PVs of its various payments. It effectively gives the real average life of the bond - for example if a hypothetical (and impossible) bond derives half of its value from a payment today and the other half from a payment in 10 years, the investor can look at the average as being 5 years (0*50% + 10*50%). That is what is what we are calculating when deriving Macaulay duration.
In this case, a reduction in the near term interest rates increases the PV of the payments received prior to the payment at 10 years. This increases the value of the bond, and also increases the weightage of the earlier payments, decreasing the Macaulay duration (by shifting it closer to now and further behind from the maturity date).
NEW QUESTION: 2
A company has a large number of users who need to access corporate resources or networks from various locations. Many users have VPN access to the network, as well as wireless internet access from BYOD approved systems tablets and smartphones. The users can also access corporate resources from an internal-facing web portal now ever all of these services require a separate set of credentials. Which of the following should the cybersecurity analyst recommend to aggregate and audit on logins while allowing the corporate directory services credentials to be shared across all of the services?
A. Kerberos
B. SAML
C. SSO
D. RADIUS
Answer: B
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