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NEW QUESTION: 1
Caps, floors and collars are instruments designed to:
A. Hedge interest rate risks
B. Hedge against credit spreads changing
C. Hedge gamma risk in option portfolios
D. All of the above
Answer: A
Explanation:
Explanation
Interest rate caps are effectively call options on an underlying interest rate that protect the buyer of the cap against a rise in interest rates over the agreed exercise rate. As with options, the premium on the cap depends upon the volatility of the underlying rates as one of its variables. A floor is the exact opposite of a cap, ie it is effectively a put option on an underlying interest rate that protects the buyer of the floor against a fall in interest rates below the agreed exercise rate.
A cap protects a borrower against a rise in interest rates beyond a point, and a floor protects a lender against a fall in interest rates below a point.
A collar is a combination of a long cap and a short floor, the idea being that the premium due on the cap is offset partly by the premium earned on the short floor position. Therefore a collar is less expensive than a cap or a floor.
Caps, floors and collars provide a hedge against interest rate risks, but do not protect against changes in credit spreads unless the reference rate already includes the spread (eg, by reference to the corporate bond rate), and they certainly do not have anything to do with gamma risk. Therefore Choice 'c' is the correct answer.
NEW QUESTION: 2
A. Option A
B. Option B
C. Option C
D. Option D
Answer: B
NEW QUESTION: 3
You are creating a strategy for backing up MySQL using a cold binary backup. The MySQL instance is a replication master with global transaction identifiers (GTIDs) enabled and it uses Transparent Data Encryption (TDE). Other than the configuration required to make the instance a replication master and enabled GTIDs and TDE, the instance is using all default settings.
The requirements for the backup are:
* It must be possible to rebuild the instance using the backup.
* It must be verified.
* It must allow for a catastrophic hardware failure.
Which four steps must be included in the backup strategy? (Choose four.)
A. Include the ibtmp1 file in the backup.
B. Copy the backup to a remote host.
C. Include the relay logs in the backup.
D. Include the binary logs in the backup.
E. Include the keyring data and/or configuration in the backup.
F. Include the MySQL PID file in the backup.
G. Include the operating system disk encryption key in the backup.
H. Include the MySQL socket file in the backup.
I. Restore the backup to a clean MySQL instance.
Answer: B,C,F,G
NEW QUESTION: 4
When configuring LACP between an Ethernet switch and an Isilon node, what is an important consideration?
A. Isilon cluster side is considered passive
B. SmartConnect Advanced must be licensed
C. Dynamic pool must be used
D. Switch must be configured as passive
Answer: A
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