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NEW QUESTION: 1
Which menu path takes you to the CAR report that should be run to determine the length of long distance calls made from a company?
A. Top N > By Duration
B. Bills > Department
C. Top N > Number of Calls
D. Bills > Individual
Answer: A
NEW QUESTION: 2
A bank prices retail credit loans based on median default rates. Over the long run, it can expect:
A. Underestimation and therefore underpricing of risk in it retail portfolio
B. Overestimation of risk and overpricing, leading to loss of market share
C. Correct pricing of risk in the retail credit portfolio
D. A reduction in the rate of defaults
Answer: A
Explanation:
Explanation
The key to pricing loans is to make sure that the prices cover expected losses. The correct measure of expected losses is the mean, and not the median. To the extent the median is different from the mean, the loans would be over or underpriced.
The loss curve for credit defaults is a distribution skewed to the right. Therefore its mode is less than its median which is less than its mean. Since the median is less than the mean, the bank is pricing in fewer losses than the mean, which means over the long run it is underestimating risk and underpricing its loans. Therefore Choice 'd' is the correct answer.
If on the other hand for some reason the bank were overpricing risk, its loans would be more expensive than its competitors and it would lose market share. In this case however, this does not apply. Loan pricing decisions are driven by the rate of defaults, and not the other way round, therefore any pricing decisions will not reduce the rate of default.
NEW QUESTION: 3
Customer 'A' has sites on 3 different Alcatel-Lucent PE routers. The routers are connected to each other through an IP/MPLS network in a full mesh fashion. Customer 'A' requires a VPLS service. Which of the following statements are TRUE? (Choose2)
A. Each router requires 3 SDPs
B. Each router requires 1 VPLS service.
C. Each router requires 2 SDPs.
D. Each router requires 2 VPLS services.
E. Each router requires 1 SDP with 2 LSPs, one to each of the other 2 routers.
Answer: B,C
NEW QUESTION: 4
What does it mean when message m is ignored in a combined fragment?
A. If m happens, the system should abort.
B. One or more m messages may appear at any point within the fragment.
C. Message m appears only in illegal traces of the fragment.
D. Nothing happens within the fragment until m appears.
Answer: B