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NEW QUESTION: 1
Which of the following will have a higher reinvestment risk when compared to a 6% bond issued at par?
Assume all bonds have identical yield to maturity.
I. A coupon bearing bond with a coupon rate of 2%
II. An amortizing bond
III. A coupon bearing bond with a coupon rate of 11%
IV. A zero coupon bond
A. I, II and IV
B. II, III and IV
C. II and III
D. I and III
Answer: C
Explanation:
Explanation
Imagine a bond that provides just two cash flows: $100 in one year and $10 in 10 years. Imagine another bond that pays nothing now but $100 in 10 years. Assume that both have identical yields to maturity. Yet despite the identical YTM, the bonds are quite dissimilar. For the first bond, we face the risk that we would receive the bulk of the present value of the bond in an year's time, and while there is a small amount due in 10 years, the first payment may not find an equally attractive investment opportunity. Reinvestment risk refers to the risk that cash flows from a bond may not be investible at the yield to maturity for the bond. In such cases, bonds that have longer durations are preferable.
A coupon bearing bond with a coupon rate lower than our benchmark bond will carry a lower reinvestment risk as its cash flows are weighted more towards the end. An amortizing bond returns a part of the principle periodically, increasing reinvestment risk. A higher coupon bearing bond will have a higher reinvestment risk, and a zero coupon bond will have the least reinvestment risk.
NEW QUESTION: 2
What must be done after a managed computer has been patched?
A. Run a Microsoft Vulnerability Analysis task.
B. Run a Software Inventory task.
C. Update the Agent Configuration policy.
Answer: C
NEW QUESTION: 3
Your customer has a compensation plan template with the functional currency EUR. The manager's own currency is USD. The manager's compensation worksheet contains employees who are paid in the following currencies: EUR, USD, CHF and GBP.
Which view must you enable to make sure the manager can display the salary of all of their employees in USD?
Please choose the correct answer.
Response:
A. The includeLocalCurrency view
B. The includePlannerCurrency view
C. The includeFunctionalCurrency view
D. The includeAnyCurrency view
Answer: A
