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NEW QUESTION: 1
Basis risk between spot and futures prices for stock indices is caused by changes in:
I. The risk free rate, or the funding cost for the futures
II. Expected dividend yield
III. Volatility of the underlying stock index
A. I, II and III
B. I and II
C. II and III
D. I and III
Answer: B
Explanation:
Explanation
Basis risk between spot and futures prices is the risk that the prices of the futures contract will not move in lockstep with the spot prices. Basis risk creates a problem when investors are trying to get exposure to a stock price through a futures contract, or are trying to hedge a position using a futures contract, and over time the prices of these two diverge.
To understand why basis risk arises, we need to think about how futures prices are determined. Futures prices are nothing but the spot prices plus the carrying cost, ie what it would cost for the seller of the contract to buy the spot security and hold it till the time of delivery in the future. During this holing period, the seller of the contract has to pay interest to fund his purchase in the spot market, and also receives and distributions such as dividends. In the case of commodity futures, he may also have to pay storage charges. When determining the futures prices, it is not known with complete certainty as to what the carrying costs will ultimately turn out to be - interest rates may change, dividends may turn out to be more or less, leading to changes in the futures prices without changes in the spot prices. This gives rise to basis risk.
Therefore changes to the risk free rate, which is a proxy for the true funding cost of the futures position and changes in expected dividends creates basis risk. Volatility of the underlying is irrelevant for futures.
Therefore Choice 'b' is the correct answer.

NEW QUESTION: 2
Which of the following services are enabled on the MGT interface by default? (Select all correct answers.)
A. SSH
B. HTTP
C. HTTPS
D. Telnet
Answer: A,C

NEW QUESTION: 3
Refer to the exhibit. Users are unable to access web servers 192.168.101.3/24 and 192.168.102.3/24 using Firefox web browser when initiated from 172.16.1.0/24 network. What could be the possible cause?

A. Access policy "Allow Policy" has incorrect action set for the custom URL category.
B. Access policy "Allow policy" is pointing to incorrect identification profile.
C. Identification profile "Allow Profile" has incorrect source subnet.
D. Custom URL category "Allowed Sites" has incorrect servers address listed.
E. Identification profile "Allowed Profile" has misconfigured user agent.
F. Identification profile "Allow Profile" has incorrect protocol.
Answer: E

NEW QUESTION: 4
Which two statements about a gatekeeper are correct? (Choose two.)
A. A gatekeeper provides address translation.
B. The gatekeeper is an H.323 entity.
C. A gatekeeper enables the auto-attendant feature.
D. A gatekeeper provides service prefixes to the MCU.
Answer: B,C