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NEW QUESTION: 1
A. Option B
B. Option D
C. Option A
D. Option C
Answer: D
NEW QUESTION: 2
Ben Nagler wants to purchase a bond and has narrowed his selection down to two choices. He is indifferent between holding a bond for 13 periods or 18 periods. He knows the spot rates for each bond but wants to compute the 5f13 . What is the 5 period forward rate 13 periods from now assuming a spot rate of 5.0127% for 13 periods and another spot rate of 5.2350% in 18 periods?
A. 5.0873%
B. 6.3955%
C. 5.8141%
Answer: C
Explanation:
Forward rate calculations require candidates to assess the future interest rate for some period in the future. The appropriate nomenclature for this problem is shown as 5f13 . The subscript before "f" is "t" or the length of time that the rate applies. The subscript after "f" is "m" and refers to the period when the forward rate begins. This question asks what the 5 forward rate is 13 periods into the future.
Candidates should remember that spot rates are related to forward rates. In fact, the spot rates contain the forward rates implied by the market. This calculation is very complicated and provides numerous opportunities to make an error. Candidates should remember to always place the longer period spot rate in the numerator and the smaller period in the denominator. Moreover, it is important to take one half of the spot rate and add "1" to each spot rate before using the exponent function. An important distinction to note when computing a forward rate for multiple time periods is the exponent computation after dividing the longer spot rate by the shorter spot rate. This additional computation recognizes the geometric return earned on the bond during the time period.
Finally it is important to remember to subtract "1" at the end of the calculation and double (for the annualized forward rate). Many students may make an error in forgetting to double (or halve) certain calculations or by forgetting to add or subtract the number 1 when dealing with the exponential functions.
The detailed answer is shown below:
((Spot rate for 18 periods)18/(Spot rate for 13 periods)13)(1/5) The spot rate for 18 periods equals 5.2350
The spot rate for 13 periods equals 5.0127 The numerator becomes (1+ 0.0262)18 or 1.5922 and the denominator becomes (1 + 0.0251)13 or 1.3796 Next, divide1.5922 by 1.3796 = 1.1541 then take the 1/5 root = 1.0291 subtract 1 =the semiannual rate of 0.0291% Doubling the semiannual rate provides the annualized forward rate or the answer of 5.8141%.
NEW QUESTION: 3
Which two features are supported with the ASA packet-tracer command? (Choose two.)
A. debugging packets in noncluster nodes
B. displaying each matching policy as a packet transits the firewall
C. injecting tracer packets through the firewall into the data path
D. simulating a packet decrypt
E. injecting modified ICMP packets through the firewall into the data path
Answer: C,D
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