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NEW QUESTION: 1
Which of the following situations are not suitable for applying parametric VaR:
I. Where the portfolio's valuation is linearly dependent upon risk factors II. Where the portfolio consists of non-linear products such as options and large moves are involved III. Where the returns of risk factors are known to be not normally distributed
A. I and III
B. All of the above
C. I and II
D. II and III
Answer: D
Explanation:
Explanation
Parametric VaR relies upon reducing a portfolio's positions to risk factors, and estimating the first order changes in portfolio values from each of the risk factors. This is called the delta approximation approach. Risk factors include stock index values, or the PV01 for interest rate products, or volatility for options. This approach can be quite accurate and computationally efficient if the portfolio comprises products whose value behaves linearly to changes in risk factors. This includes long and short positions in equities, commodities and the like.
However, where non-linear products such as options are involved and large moves in the risk factors are anticipated, a delta approximation based valuation may not give accurate results, and the VaR may be misstated. Therefore in such situations parametric VaR is not advised (unless it is extended to include second and third level sensitivities which can bring its own share of problems).
Parametric VaR also assumes that the returns of risk factors are normally distributed - an assumption that is violated in times of market stress. So if it is known that the risk factor returns are not normally distributed, it is not advisable to use parametric VaR.

NEW QUESTION: 2
Which of the following statements are true about cloud-based IT resources? SELECT ALL THAT APPLY
A. A cloud-based IT resource can exist as a physical or virtual IT-related artifact.
B. For a cloud-based IT resource to be made available to cloud service consumers, it needs to be accessible as a cloud service agent.
C. A cloud-based IT resource resides inside a cloud environment.
D. For an IT resource to be considered a cloud-based IT resource, it needs to be made directly available to cloud service consumers.
Answer: A,C

NEW QUESTION: 3
Margaret Walker, who would become one of the most important twentieth century African-American poets,
was born in Birmingham, Alabama, in 1915. Her parents, a minister and a music teacher, encouraged her
to read poetry and philosophy even as a child. Walker completed her high school education at Gilbert
Academy in New Orleans and went on to attend New Orleans University for two years. It was then that the
important Harlem Renaissance poet Langston Hughes recognized her talent and persuaded her to
continue her education in the North. She transferred to Northwestern University in Illinois, where she
received a degree in English in 1935. Her poem, "For My People," which would remain one of her most
important works, was also her first publication, appearing in Poetry magazine in 1937.
The passage cites Walker's interaction with Langston Hughes as
A. instrumental in her early work being published.
B. not as important at the time it happened as it is now, due to Hughes' fame.
C. influential in her decision to study at Northwestern University.
D. a great encouragement for Walker's confidence as a poet.
E. important to her choice to study at New Orleans University.
Answer: C
Explanation:
The passage states that Langston Hughes "persuaded her to continue her education in the North." And
the passage uses this fact to explain her transfer to Northwestern. This is what (B), the correct answer,
suggests

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