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NEW QUESTION: 1
A portfolio manager desires a position of $10m in physical gold, but chooses to get the exposure using gold futures to conserve cash. The volatility of gold is 6% a month, while that of gold futures is 7% a month. The covariance of gold and gold futures is 0.00378 a month. How many gold contracts should he hold if each contract is worth $100k in gold?
A. 0
B. 1
C. 2
D. 3
Answer: B
Explanation:
Explanation
The optimal hedge ratio answers the question of how much of the hedge to buy to hedge a given position.
If 103.11.e1 is the standard deviation of the asset to be hedged, and 103.11.e2 is the standard deviation the asset being used to hedge against price movements in x, then the minimum variance hedge ratio is given by the expression 103.11.e3. In this question, correlation = 0.00378/(6%*7%) = 0.9. The minimum variance hedge ratio is given by (6%/7%)*0.9 = 0.77 He should therefore hold 0.77 x $10m /$100k = 77 contracts.
[We can also do a direct covar based calculation for the min variance hedge ratio as follows:

103.11.a3
= 0.00378 / (0.07 * 0.07) = 0.7714]

NEW QUESTION: 2
Which three steps must be taken to assign a new IP address to a member of a NSX Management Cluster that was deployed manually? (Choose three.)
A. Delete NSX Manager VM
B. Execute detach node <node-id> from the NSX Manager CLI
C. Change IP address of NSX Manager in vApp Properties
D. Deploy new NSX Manager VM
E. Delete NSX Management cluster member from NSX Simplified UI
Answer: A,B,D
Explanation:
Explanation
https://docs.vmware.com/en/VMware-NSX-T-Data-Center/2.4/administration/GUID-91248B32-856A-4254 ProcedureIf the NSX Manager you want to remove was deployed manually, perform the following steps.
1. Run the following CLI command to detach the NSX Manager from the cluster. "detach node "2.
Delete the NSX Manager VM.3. Deploy a new NSX Manager.

NEW QUESTION: 3
An engineer is configuring high availability for crypto-map-based site-to-site VPNs on Cisco devices.
Which protocol must be used?
A. VRRP
B. ESP
C. BFD
D. HSRP
Answer: D