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NEW QUESTION: 1
Refer to the exhibit.

Users on the 172.16.1.0/24 and 172.16.3.0/24 networks report that they frequently lose connectivity to the remote network. Which cause of the problem is true?
A. IP access list
B. RIP auto summarization
C. recursive routing
D. static IP routes
Answer: C

NEW QUESTION: 2
Which of the following is not an example of a risk concentration?
A. Large combined positions in assets affected by different risk factors that are highly correlated
B. Material amounts of treasury obligations held as collateral provided by a single counterparty
C. Origination of a large number of SIVs with exposures to the same asset class, where the SIVs are separate legal entities without recourse to the originator
D. Location of a portfolio's assets in a single country but spread across different industries
Answer: B
Explanation:
Explanation
Choice 'd' represents a risk concentration due to excessive exposure to a single country, even though spread across different industries as the risk factors (economy, exchange rate, interest rate, political risk etc) are the same for all companies in the country.
Choice 'a' represents a risk concentration because even though the risk factors are different, they are highly correlated and therefore effectively behave as one. These undetected correlations proved to be fatal to many financial institutions during the credit crisis.
Choice 'b' represents a risk concentration as was borne out by the recent credit crisis. Large banks had to take over the obligations of SIVs they had created, even though the SIVs were separate legal entities with no legally enforceable recourse to the originating bank. This had to be done for moral and reputational reasons, and banks had to absorb the losses of these supposedly separate vehicles.
Choice 'c' does not represent a risk concentration, in fact it is not a risk at all because it refers to collateral held, even though the collateral may have been provided by the same counterparty. In this case the risk is to the party providing the collateral (in case the party holding the collateral rehypothecates or sells the collateral and is unable to return it).
Therefore Choice 'c' is the correct answer.
The BCBS document on stress testing provides a very nice articulation of risk concentration, and the relevant text from that document is produced verbatim here: [Risk concentration] may arise along different dimensions:
single name concentrations; concentrations in regions or industries; concentrations in single risk factors; concentrations that are based on correlated risk factors that reflect subtler or more situation-specific factors, such as previously undetected correlations between market and credit risks, as well as between those risks and liquidity risk; concentrations in indirect exposures via posted collateral or hedge positions; concentrations in off-balance sheet exposure, contingent exposure, non-contractual obligations due to reputational reasons.

NEW QUESTION: 3
Identify the true statement regarding an expenditure item.
A. An expenditureitem can be adjusted only on the capitalizable attributes of a transaction.
B. An expenditure item can be adjusted on both billable and capitalizeable attributes of a transaction.
C. An expenditure item con be adjusted only on the billableattributes of atransaction.
D. An expenditure Item cannotbe adjusted on any attributes of transcation.
Answer: A
Explanation:
Reference: http://docs.oracle.com/cd/E29597_01/fusionapps.1111/e36898/F825915AN6F9D4.htm