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NEW QUESTION: 1
Which of the following statements are true for a portfolio of two assets:
I. Given volatility, weights and correlation, combined standard deviation cannot be calculated without additional information on covariances.
II. When the two assets are perfectly negatively correlated, the standard deviation of the combined portfolio is just the weighted average of their standard deviations, weighted by their weights in the portfolio.
III. When the two assets are uncorrelated, the standard deviation of the combined portfolio is just the weighted average of their standard deviations, weighted by their weights in the portfolio.
IV. When the two assets are perfectly positively correlated, the standard deviation of the combined portfolio is just the weighted average of their standard deviations, weighted by their weights in the portfolio.
A. I and III
B. IV
C. All of the above
D. II and IV
Answer: B
Explanation:
Explanation
Given volatility, weights and correlation, we do not need any additional information on covariances - and therefore statement I is incorrect.
To evaluate the other statements, consider the formula for portfolio variance (recalling that standard deviation is just the square root of the variance) portfolio_var_diff_corr Statement II is incorrect because this statement describes what the standard deviation of the portfolio would be if the assets were to be perfectly positively correlated (here they are negatively correlated).
Statement III is incorrect. When the two assets are uncorrelated (ie correlation = 0), the combined standard deviation is the square root of the weighted sum of variances, where the squares of the asset weights are used as weights (see formula above).
Statement IV is correct. When the assets are perfectly positively correlated, they are effectively the same asset and the combined standard deviation of a portfolio of such assets is nothing but the sum of their weighted standard deviations.
Also refer to the tutorial (and the Excel model - you will find it under Exam 2) for portfolio variances to see how portfolio volatility behaves when correlations are -1, 0 or +1.
NEW QUESTION: 2
In a Configurable Product, there is a requirement to disallow some attributes if the value of attribute ''Number of users'' equal to or greater than 100, and less than 1000. How would you write this condition in a product rule?
Note: There are 2 correct answers to this question.
A. [INR](<*Value (Number of user)*>, 100,999)
B. [AND] ([GEQ] (<*Value (Number of user)*>, 100), [LT] (<*Value (Number of users)*>, 1000))
C. [IN] (<*Value (Number of user)*>, 100, 1000)
D. [OR] ([GEQ] <*Value (Number of user)*>, 100), [LT] (<*Value (Number of users)*>, 1000))
Answer: A,B
NEW QUESTION: 3
Which of the following statements best describes the output from an Nokia 7750 SR shown below?
A. The As-Path is not present as VPN-IPv4 routes do not propagate the IPv4 As-Path BGP attribute
B. The As-Path is not present as a policy was configured to set it to the null value
C. The As-Path is not present as it was removed with the s-override configuration command
D. The As-Path is not present as it was removed with the o-as-path configuration command
Answer: B
NEW QUESTION: 4
A. Option C
B. Option A
C. Option D
D. Option B
Answer: D
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