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NEW QUESTION: 1
Changes in which of the following do not affect the expected default frequencies (EDF) under the KMV Moody's approach to credit risk?
A. Changes in the debt level
B. Changes in the firm's market capitalization
C. Changes in the risk free rate
D. Changes in asset volatility
Answer: C
Explanation:
Explanation
EDFs are derived from the distance to default. The distance to default is the number of standard deviations that expected asset values are away from the default point, which itself is defined as short term debt plus half of the long term debt. Therefore debt levels affect the EDF. Similarly, asset values are estimated using equity prices.
Therefore market capitalization affects EDF calculations. Asset volatilities are the standard deviation that form a place in the denominator in the distance to default calculations. Therefore asset volatility affects EDF too.
The risk free rate is not directly factored in any of these calculations (except of course, one could argue that the level of interest rates may impact equity values or the discounted values of future cash flows, but that is a second order effect). Therefore Choice 'b' is the correct answer.

NEW QUESTION: 2
Where is EAPoL traffic seen?
A. None of the above
B. Between the supplicant and the authenticator
C. Between the authenticator and the authentication server
D. Between the supplicant and the authentication server
Answer: B

NEW QUESTION: 3
Which of the following is the MOST important reason for an information security review of contracts? To help ensure that:
A. the right to audit is a requirement.
B. the parties to the agreement can perform.
C. appropriate controls are included.
D. confidential data are not included in the agreement.
Answer: C
Explanation:
Agreements with external parties can expose an organization to information security risks that must be assessed and appropriately mitigated. The ability of the parties to perform is normally the responsibility of legal and the business operation involved. Confidential information may be in the agreement by necessity and. while the information security manager can advise and provide approaches to protect the information, the responsibility rests with the business and legal. Audit rights may be one of many possible controls to include in a third-party agreement, but is not necessarily a contract requirement, depending on the nature of the agreement.