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NEW QUESTION: 1
A bank extends a loan of $1m to a home buyer to buy a house currently worth $1.5m, with the house serving as the collateral. The volatility of returns (assumed normally distributed) on house prices in that neighborhood is assessed at 10% annually. The expected probability of default of the home buyer is 5%.
What is the probability that the bank will recover less than the principal advanced on this loan; assuming the probability of the home buyer's default is independent of the value of the house?
A. 0
B. More than 1%
C. Less than 1%
D. More than 5%
Answer: C
Explanation:
Explanation
The bank will not be able to recover the principal advanced on this loan if both the home buyer defaults, and the house value falls to less than $1m, ie the price moves adversely by more than $500k, which is
$-500k/$150k = -3.33. (Note that 150k is the 1 year volatility in dollars, ie $1.5m * 10%).
The probability of both these things happening together is just the product of the two probabilities, one of which we know to be 5%. The other is also certainly a small number, and intuitively it is clear that the probability of both the things happening together will be less than 1%.
For a more precise answer, we can calculate the probability of the house price falling by 3.33 standard deviations by calculating the area under the standard normal curve to the left of -3.33. This indeed is a very small number (actually equal to NORMSINV(-3.33)=0.00043), which when multiplied by the probability of default of the home buyer at 5% is certainly going to be less than 1%. Therefore Choice 'b' is the correct answer.

NEW QUESTION: 2
DRAG DROP
You plan to deploy a SharePoint Server 2013 server farm.
Three users named User1, User2, and User3 will perform administrative tasks.
You need to identify to which group the users must be assigned to ensure that the users can perform the following tasks:
User1 must be able to configure application domains.
User2 must be able to organize enterprise keywords.
User3 must be able to manage blocked file types.
The solution must minimize the number of privileges assigned to each user.
To which group should you assign each user? (To answer, drag the appropriate groups to the correct users. Each group may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.)
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Answer:
Explanation:

NEW QUESTION: 3
Which are three use cases in which SQL Performance Analyzer can be used?
A. find and flashback explain plan anomalies
B. debug SQL code syntax before and after a change
C. compare performance of SQL statements before and after a change
D. forecast impact of a system change on a SQL workload
E. JSQL Heap Memory overflow testing
F. simulate Exadata on existing hardware
Answer: C,D,F