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Exam Code: H11-851_V3.0

Exam Name: HCIA-Video Conference V3.0

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Related Certification: HCIA-Video Conference V3.0

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NEW QUESTION: 1
William Rogers, a fixed-income portfolio manager, needs to eliminate a large cash position in his portfolio.
He would like to purchase some corporate bonds. Two bonds that he is evaluating are shown in Exhibit I.
These two bonds are from the same issuer, and the current call price for the callable bond is 100. Assume that the issuer will call if the bond price exceeds the call price.
Rogers is also concerned about increases in interest rates and is considering the purchase of a putable bond. He ants to determine how assumed increases or decreases in interest rate volatility affect the value of the straight bonds and bonds with embedded options. After Rogers performs some analysis, he and his supervisor, Sigourney Walters, discuss the relative price movement between the two bonds in Exhibit 1 when interest rates change significantly During the discussions, Rogers makes the following statements:
Statement 1: If the volatility of interest rates decreases, the value of the callable bond will increase.
Statement 2: The noncallable bond will not be affected by a change in the volatility or level of interest rates.
Statement 3: When interest rates decrease, the value of the noncallable bond increases by more than the callable bond.
Statement4: If the volatility of interest rates increases, the value of the putable bond will increase.
Walters mentors Rogers on bond concepts and then asks him to consider the pricing of a third bond. The third bond has five years to maturity, a 6% annual coupon, and pays interest semiannually. The bond is both callable and putable at 100 at any time. Walters indicates that the holders of the bond's embedded options will exercise if the option is in-the-money.

Rogers obtained the prices shown in Exhibit b using software that generates an interest rate lattice. He uses his software to generate the interest rate lattice shown in Exhibit 2.
Exhibit 2: Interest Rate Lattice (Annualized Interest Rates)

Using the information in the question and the following relevant portion of the interest rate and pricing trees, Rogers calculates the value of the callable bond at node B.
Corresponding portion of the interest rate tree:

Corresponding portion of the callable bond price tree:

The price of the callable bond at node B is closest to:
A. 101.4%.
B. 100.0%.
C. 102.5%.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
The correct value is 100.00. The computed value of the callable bond at node A is obtained as follows:

However, when working with a callable bond, you have to remember that the value of the bond at any node is the lesser of (1) the bonds computed value or (2) the call price. So, we have:

In this case, since the computed value (101.4) is greater than the call price (100), the nodal value is $100.
(Study Session 14, LOS 54.d)

NEW QUESTION: 2
The PRIMARY purpose of an IT forensic audit is:
A. to participate in investigations related to corporate fraud.
B. to determine that there has been criminal activity.
C. the systematic collection of evidence after a system irregularity.
D. to assess the correctness of an organization's financial statements
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice B describes a forensic audit. The evidence collected could then be used in judicial proceedings.
Forensic audits are not limited to corporate fraud. Assessing the correctness of an organization's financial statements is not the purpose of a forensic audit. Drawing a conclusion as to criminal activity would be part of a legal process and not the objective of a forensic audit.

NEW QUESTION: 3
Where is the data collected by Coremetrics technology?
A. From log files.
B. From server-side code.
C. From log files, end-users?browsers, or server-side code.
D. From the end-users?browser.
Answer: D

NEW QUESTION: 4
What is the BEST method to verify that all security patches applied to servers were properly documented?
A. Trace OS patch logs to change control requests
B. Review change control documentation for key servers
C. Trace change control requests to operating system (OS) patch logs
D. Trace OS patch logs to OS vendor's update documentation
Answer: A
Explanation:
To ensure that all patches applied went through the change control process, it is necessary to use the operating system (OS) patch logs as a starting point and then check to see if change control documents are on file for each of these changes. Tracing from the documentation to the patch log will not indicate if some patches were applied without being documented. Similarly, reviewing change control documents for key servers or comparing patches applied to those recommended by the OS vendor's web site does not confirm that these security patches were properly approved and documented.


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