MD-102 Practice Questions

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NEW QUESTION: 1
Which is evidenced by the Business Case?
A. Continuing affordability of the programme
B. Information about what will be subject to review
C. Responsibility for managing the Business Change Team
D. Risk responses for the initial programme risks
Answer: A

NEW QUESTION: 2
Which of the following statements is true:
I. Expected credit losses are charged to the unit's P&L while unexpected losses hit risk capital reserves.
II. Credit portfolio loss distributions are symmetrical
III. For a bank holding $10m in face of a defaulted debt that it acquired for $2m, the bank's legal claim in the bankruptcy court will be $10m.
IV. The legal claim in bankruptcy court for an over the counter derivatives contract will be the notional value of the contract.
A. I, II and IV
B. II and IV
C. III and IV
D. I and III
Answer: D
Explanation:
Explanation
Statement I is true as expected losses are the 'cost of doing business' and charged against the P&L of the unit holding the exposure. When evaluating the business unit, expected losses are taken into account. Unexpected losses however require risk capital reserves to be maintained against them.
Statement II is not true. Credit portfolio loss distributions are not symmetrical, in fact they are highly skewed and have heavy tails.
Statement III is true. The notional, or the face value of a defaulted debt is the basis for a claim in bankruptcy court, and not the market value.
Statement IV is false. In the case of over the counter instruments, the replacement value of the contract represents the amount of the claim, and not the notional amount (which can be very high!).

NEW QUESTION: 3

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

NEW QUESTION: 4
A company produces lotions for pain relief and uses Dynamics 365 for Finance and Operations.
You have been provided the following information for a new relieving lotion.

Use the drop-down menus to select the answer choice that completes each statement based on the information presented in the graphic.
NOTE: Each correct selection is worth one point.

Answer:
Explanation: