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NEW QUESTION: 1
Based on its current operating levels Glucose LLC estimates that its annual level of taxable profit in the foreseeable future will be US $200,000 annually_ Enacted tax rates for the tax jurisdiction in which Glucose operates are 15% for the first US $50.000 of taxable profit.
25% for the next US $50.000 of taxable profit, and 35% for taxable profit in excess of US $100,000. Which tax rate should Glucose use to measure a deferred tax liability or asset?
A. 27.5%
B. 0
C. 15%
D. 25%
Answer: A
Explanation:
In measuring a deferred tax liability DTL or asset DTA), the objective is to use the enacted or substantively enacted tax rate(s) expected to apply to taxable profit in the periods in which the deferred tax liability or asset is expected to be settled or realized. If different rates apply to different taxable profit levels, a DTA or DTL is measured based on the average rates expected to apply in the periods when the TDs are expected to reverse. Accordingly, the applicable tax rate is 21.5%.

NEW QUESTION: 2
If an internal database holds a number of printers in every department and this equals the total number of printers for the whole organization recorded elsewhere in the database, it is an example of:
A. Internal consistency of the information system.
B. Referential consistency of the information system.
C. Differential consistency of the information system.
D. External consistency of the information system.
Answer: A
Explanation:
Internal consistency ensures that internal data is consistent, the subtotals match the total number of units in the data base. Internal Consistency, External Consistency, Well formed transactions are all terms related to the Clark-Wilson Model.
The Clark-Wilson model was developed after Biba and takes some different approaches to protecting the integrity of information. This model uses the following elements:
Users Active agents
Transformation procedures (TPs) Programmed abstract operations, such as read, write, and modify
Constrained data items (CDIs) Can be manipulated only by TPs
Unconstrained data items (UDIs) Can be manipulated by users via primitive read and write operations
Integrity verification procedures (IVPs) Check the consistency of CDIs with external reality Although this list may look overwhelming, it is really quite straightforward.
When an application uses the Clark-Wilson model, it separates data into one subset that needs to be highly protected, which is referred to as a constrained data item (CDI), and another subset that does not require a high level of protection, which is called an unconstrained data item (UDI).
Users cannot modify critical data (CDI) directly. Instead, the subject (user) must be authenticated to a piece of software, and the software procedures (TPs) will carry out the operations on behalf of the user. For example, when Kathy needs to update information held within her company's database, she will not be allowed to do so without a piece of software controlling these activities. First, Kathy must authenticate to a program, which is acting as a front end for the database, and then the program will control what Kathy can and cannot do to the information in the database.
This is referred to as access triple: subject (user), program (TP), and object (CDI). A user cannot modify CDI without using a TP. Well Formed Transactions A well-formed transaction is a series of operations that are carried out to transfer the data from
one consistent state to the other. If Kathy transfers money from her checking account to her
savings account, this transaction is made up of two operations: subtract money from one account
and add it to a different account. By making sure the new values in her checking and savings
accounts are accurate and their integrity is intact, the IVP maintains internal and external
consistency.
The Clark-Wilson model also outlines how to incorporate separation of duties into the architecture
of an application. If we follow our same example of banking software, if a customer needs to
withdraw over $ 10,000, the application may require a supervisor to log in and authenticate this
transaction. This is a countermeasure against potential fraudulent activities.
The model provides the rules that the developers must follow to properly implement and enforce
separation of duties through software procedures.
The following answers are incorrect:
External consistency of the information system. External consistency is were the data matches the
real world. If you have an automated inventory system the numbers in the data must be consistent
with what your stock actually is.
The other answers are distractors.
Reference(s) used for this question:
Harris, Shon (2012-10-25). CISSP All-in-One Exam Guide, 6th Edition (Kindle Locations 8146-
8159). McGraw-Hill. Kindle Edition.
and
Harris, Shon (2012-10-25). CISSP All-in-One Exam Guide, 6th Edition (Kindle Locations 8188-
8195). McGraw-Hill. Kindle Edition.
and
Harris, Shon (2012-10-25). CISSP All-in-One Exam Guide, 6th Edition, Security Architecture and
Design Ch 4, Pg, 374-376 AIO 6th Edition. McGraw-Hill.

NEW QUESTION: 3
[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.] Which of the following statements is true:
I. Knock-out options start lifeless and convert to a plain vanilla option when the barrier is hit II. Barrier options are cheaper than equivalent vanilla options III. Average price options are more expensive than equivalent vanilla options IV. Digital options have a high gamma close to the strike price
A. I, II and IV
B. II, III and IV
C. I and III
D. II and IV
Answer: D
Explanation:
Knock-out options start as plain vanilla options and are 'knocked-out', ie cease to exist, when the barrier is hit.
Knock-in options start lifeless and 'kick-in', ie come into play as plain vanilla options when the barrier is hit.
Therefore statement I is not correct.
Barrier options are certainly cheaper than equivalent vanilla options because vanilla options have a larger range of prices over which they pay out. Therefore statement II is correct.
Statement III is not correct. Average price options, also called Asian options, are less attractive to a buyer of options and therefore they are cheaper and not more expensive than vanilla options. This is because average prices are less volatile, and also when compared to a strip of equivalent vanilla options, some of the individual vanilla options in the strip may pay out whereas on the average nothing may pay out.
Digital options have a very high gamma close to the strike price as the option payout becomes uncertain and fluctuates sharply between 0 and 1. Therefore statement IV is correct.