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NEW QUESTION: 1
[According to the PRMIA study guide for Exam 1, Simple Exotics and Convertible Bonds have been excluded from the syllabus. You may choose to ignore this question. It appears here solely because the Handbook continues to have these chapters.] The profit potential from the conversion of convertible bonds into stock is limited by
A. volatility of the stock
B. the issuer's option to call the security at short notice
C. conversion premium charged by the issuer
D. a rise in interest rates
Answer: B
Explanation:
Explanation
The profit potential from the conversion of convertible bonds into stock is limited by the issuer's option to call the security at short notice. Generally, the convertible debt security is convertible into a certain number of shares, and the debt holder will generally not convert the security to shares unless there is a profit to be made.
The 'premium' is irrelevant, because as long as the premium exists, the debt holder has no incentive to convert, as he would be better off buying the shares in the market. It is only when share prices go beyond a level that it becomes advantageous convert the security into shares. However, the prospect of granting cheap shares to the debt holders is not too appealing to the issuer, and as soon as the share price goes beyond a point where the value of the shares exceeds the face value of the debt the issuer has an incentive to exercise its option to call the security.
Therefore the profit potential from the conversion of convertible bonds into shares is limited by the issuer's option to call the security, and Choice 'a' is the correct answer. The 'premium', or interest rates, or volatility are irrelevant.

NEW QUESTION: 2
The client change option does not override the system change option (t/f)?
A. TRUE
B. FALSE
Answer: A

NEW QUESTION: 3
An engineer is troubleshooting why a MAC address was not listed in the MAC table and discovers that the VLAN was enabled only on the interface that data is coming in on. Which change fixes this problem?
A. Remove loop detection on interfaces.
B. Disable sticky MAC on the access switch.
C. Enable outgoing interfaces.
D. Flush the MAC address table.
Answer: C

NEW QUESTION: 4
A member of a DB2 data sharing group (DB2A) has failed and is currently down. After a few minutes the phone starts ringing and people complain that transactions accessing table space TSA (in database DBA) get an SQLCODE -904 because of retained locks held by the member that just abended.
What is the recommended way to resolve this problem?
A. -START DB(DBA) SP(TSA) ACCESS(FORCE)
B. Delete all the failed persistent connections to the lock structure with the SETXCFFORCE,CONNECTION,STRNAME=lock_strname.CONNAME=ALL command and force the deallocation of the lock structure by issuing SETXCFFORCE,STRUCTURE.STRNAME=lock_strname
C. Restart the failed DB2 member with the LIGHT(YES) option.
D. Issue the MODIFY irlmproc.PURGE. DB2A command from an IRLM that is used by a DB2 member that is still running.}
Answer: B