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NEW QUESTION: 1
A zero coupon corporate bond maturing in an year has a probability of default of 5% and yields 12%. The recovery rate is zero. What is the risk free rate?
A. 7.00%
B. 5.00%
C. 6.40%
D. 5.26%
Answer: C
Explanation:
Explanation
The probability of default would make the expected value of the future cash flows from both the corporate bond and the risk free bond identical. If p be the probability of default, the cash flows from the risky corporate bond would be
= (cash flows in the event of default x probability of default) + (cash flows without default x (1 - probability of default))
=> 5%*0 + (1 - 5%)*(1 + 12%) = (1 + Rf).
therefore Rf = 6.4%
(In reality investors would demand a 'credit risk premium' over and above the expected default loss rate. They are unlikely to be happy with just being compensated with exactly the expected default loss rate plus the risk-fre rate because the expected default loss rate itself is uncertain. They would demand some premium over and above what the default rate alone might mathematically imply above the risk free rate. In this question, this credit risk premium is ignored.)

NEW QUESTION: 2
An administrator is concerned that a company's web server has not been patched. Which of the following would be the BEST assessment for the administrator to perform?
A. Risk assessment
B. Virus scan
C. Network sniffer
D. Vulnerability scan
Answer: D
Explanation:
A vulnerability scan is the process of scanning the network and/or I.T. infrastructure for threats and vulnerabilities. Vulnerabilities include computer systems that do not have the latest security patches installed. The threats and vulnerabilities are then evaluated in a risk assessment and the necessary actions taken to resolve and vulnerabilities. A vulnerability scan is the automated process of proactively identifying security vulnerabilities of computing systems in a network in order to determine if and where a system can be exploited and/or threatened. While public servers are important for communication and data transfer over the Internet, they open the door to potential security breaches by threat agents, such as malicious hackers. Vulnerability scanning employs software that seeks out security flaws based on a database of known flaws, testing systems for the occurrence of these flaws and generating a report of the findings that an individual or an enterprise can use to tighten the network's security. Vulnerability scanning typically refers to the scanning of systems that are connected to the Internet but can also refer to system audits on internal networks that are not connected to the Internet in order to assess the threat of rogue software or malicious employees in an enterprise.

NEW QUESTION: 3
You are creating an application that processes a list of numbers.
The application must define a method that queries the list and displays a subset of the numbers to the user. The method must not update the list.
You need to create an extendable query by using LINQ.
What should you do?

A. Option D
B. Option C
C. Option B
D. Option A
Answer: B

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