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NEW QUESTION: 1
Mark Stober, William Robertson, and James McGuire are consultants for a regional pension consultancy.
One of their clients, Richard Smitherspoon, chief investment officer of Quality Car Part Manufacturing, recently attended a conference on risk management topics for pension plans. Smitherspoon is a conservative manager who prefers to follow a long-term investment strategy with little portfolio turnover.
Smitherspoon has substantial experience in managing a defined benefit plan but has little experience with risk management issues. Smitherspoon decides to discuss how Quality can begin implementing risk management techniques with Stober, Robertson, and McGuire. Quality's risk exposure is evaluated on a quarterly basis.
Before implementing risk management techniques, Smitherspoon expresses confusion regarding some measures of risk management. "I know beta and standard deviation, but what is all this stuff about convexity, delta, gamma, and vega?" Stober informs Smitherspoon that delta is the first derivative of the call-stock price curve, and Robertson adds that gamma is the relationship between how bond prices change with changing time to maturity.
Smitherspoon is still curious about risk management techniques, and in particular the concept of VAR. He asks, "What does a daily 5% VAR of $5 million mean? I just get so confused with whether VAR is a measure of maximum or minimum loss. Just last month, the consultant from MinRisk, a competing consulting firm, told me it was 'a measure of maximum loss, which in your case means we are 95% confident that the maximum 1-day loss is $5.0 million." McGuire states that his definition of VAR is that
"VAR is a measure that combines probabilities over a certain time horizon with dollar amounts, which in your case means that one expects to lose a minimum $5 million five trading days out of every 100." Smitherspoon expresses bewilderment at the different methods for determining VAR. "Can't you risk management types formulate a method that works like calculating a beta? It would be so easy if there were a method that allowed one to just use mean and standard deviation. I need a VAR that I can get my arms around." The next week, Stober visits the headquarters of TopTech, a communications firm. Their CFO is Ralph Long, who prefers to manage the firm's pension himself because he believes he can time the market and spot upcoming trends before analysts can. Long also believes that risk measurement for TopTech can be evaluated annually because of his close attention to the portfolio. Stober calculates TopTech's 95% surplus at risk to be S500 million for an annual horizon. The expected return on TopTech's asset base (currently at S2 billion) is 5%. The plan has a surplus of $100 million. Stober uses a 5% probability level to calculate the minimum amount by which the plan will be underfunded next year.
Regarding the definitions of VAR, are MinRisk and McGuire correct or incorrect?
A. Both are correct.
B. One is correct.
C. Neither is correct.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Both MinRisk and McGuire are correct.
VAR can be considered a minimum loss expected over a time horizon at a given probability. In this particular case, one would expect to exceed the VAR 5% of the time. MinRisk interpretation is also correct.
Watch the wording in VAR questions.
VAR is a measure that combines probabilities over a certain time horizon with dollar amounts, which in the statement means that one expects to lose at least $5 million in five trading days out of 100. (Study Session
14, LOS 40.e)

NEW QUESTION: 2
HOTSPOT
You are the Office 365 administrator for your company's Microsoft Exchange Online environment. The company recently subscribed to the Office 365 Enterprise E3 plan.
Employees currently archive old email messages in .pst files. The company has now mandated that all email messages stored in .pst files must be archived online.
You need to enable archiving for all mailboxes.
How should you complete the relevant Windows PowerShell script? To answer, select the appropriate cmdlet from each list in the answer are a.
NOTE: Each correct selection is worth one point.


Answer:
Explanation:

In-Place Archiving helps you regain control of your organization's messaging data by eliminating the need for personal store (.pst) files. With archiving enabled, users can store messages in an archive mailbox, also called an In-Place Archive, which is accessible by using Microsoft Outlook and Outlook Web App.
In this question, we use the Get-Mailbox cmdlet to retrieve a list of all mailboxes.
The -Filter {(RecipientTypeDetails -eq 'UserMailbox')} option is used to retrieve a list of user mailboxes only (thus excluding Room mailboxes, Resource mailboxes etc).
The Enable-Mailbox -Archive command is used to create an archive for each user mailbox returned by the Get-Mailbox command.
References:
https://technet.microsoft.com/en-us/library/jj984357(v=exchg.150)

NEW QUESTION: 3
Which of the following statements describe business process steps that are not suitable for service encapsulation?
A. business process steps that are related to the functional context of a business entity
B. business process steps that contain decision logic based upon business rules
C. business process steps that are performed by existing legacy systems that may introduce unacceptable performance constraints or security risks
D. manual business process steps that cannot be automated
Answer: C,D