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NEW QUESTION: 1
Calculate the 99% 1-day Value at Risk of a portfolio worth $10m with expected returns of 10% annually and volatility of 20%.
A. 0
B. 1
C. 2
D. 3
Answer: C
Explanation:
Explanation
Be wary of questions asking you to calculate VaR where the mean or expected returns are different from zero.
The VaR formula of z-value times standard deviation needs to have an adjustment for the expected return [ie use VaR = z-value times standard deviation minus expected return]. In this case, the standard deviation for 1 day for the portfolio is =SQRT(1/250)*20%*$10m = $126,491. The VaR is therefore (2.326 * $126,491) - ($10,000,000 * 10% * 1/250) = $290,218.
NEW QUESTION: 2
An IPv4 MPLS provider network is being configured for 6VPE. BGP is being used for the PE-CE protocol to exchange IPv6 routes.
Which of the following is FALSE?
A. PE routers must be configured to run MP-BGP.
B. PE-to-CE BGP sessions need to be configured to support IPv6.
C. MP-BGP in the provider network needs to support the VPN-IPv6 address family.
D. The provider network core must be configured to support IPv6.
Answer: D
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A. (i) only
B. (i) and (ii) only
C. (i), (ii) and (iii)
D. (ii) only
Answer: B
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