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NEW QUESTION: 1
Which of the following BEST describes malicious software that demands the end-user pay a fee or face the destruction of their files?
A. Spyware
B. Trojan
C. Ransomware
D. Virus
Answer: C
NEW QUESTION: 2
What is the initial objective when laying the groundwork for an opportunity to sell IBM's Business Analytics FPM solutions?
A. Meeting with the CIO directly
B. Getting into the office of finance
C. Meeting only with the CFO
D. Getting into the office of IT
Answer: B
NEW QUESTION: 3
Which devices support cluster?
A. All of them
B. FTD
C. NGIPSv
Answer: B
NEW QUESTION: 4
What would be the consequences of a model of economic risk capital calculation that weighs all loans equally regardless of the credit rating of the counterparty?
I. Create an incentive to lend to the riskiest borrowers
II. Create an incentive to lend to the safest borrowers
III. Overstate economic capital requirements
IV. Understate economic capital requirements
A. II and III
B. I and IV
C. III only
D. I only
Answer: B
Explanation:
Explanation
If capital calculations are done in a standard way regardless of risk (as reflected by credit ratings), then it creates a perverse incentive for the lenders' employees to lend to the riskiest borrowers that offer the highest expected returns as there is no incentive to 'save' on economic capital requirements that are equal for both safe and unsafe borrowers. Therefore statement I is correct.
Given that the portfolio of such an institution is likely to then comprise poor quality borrowers, and economic capital would be based upon 'average' expected ratings, it is likely to carry lower economic capital given its exposures. Therefore any such economic risk capital model is likely to understate economic capital requirements. Therefore statement IV is correct.
Statements II and III are incorrect and Choice 'b' is the correct answer.
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