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NEW QUESTION: 1
An investor holds a portfolio of mortage backed securities valued at $100m. Using a Monte Carlo based pricing model, he determines that the value of the portfolio would rise to $102m if interest rates were to fall by
45 basis points, and fall to $97m if interest rates were to rise by 45 basis points. What is the estimated modified duration of the investor's portfolio?
A. None of the above
B. 11.12
C. 0
D. 5.56
Answer: D
Explanation:
Explanation
For fixed income portfolios where standard cash flow discounting models are not available, duration calculations are based upon estimated price moves in response to a change in rates. Recall that we define duration as the percentage change in price expected for a 1% change in yield. In this case, we have three price points known to us:
Line | Price | Yield
a | $102 | r - 45bps
b | $100 | r
c | $ 97 | r + 45bps
(where r is the current yield)
The change in price from line a to line c is $102m - $97m = $5m. We use the middle point, ie $100m, to calculate the percentage change. Therefore the percentage change in price is $5m/$100m = 5%.
The change in yield between lines a and c is 90 basis points [=(r+45bps) - (r-45bps)]. In other words, the change in price is 5% for a 90 bps change in yield. So the duration can be calculated as 5/(90/100) = 5.56. The other answers are incorrect.

NEW QUESTION: 2
Match each application to its definition.
To answer, drag the appropriate application from the column on the left to its definition on the right. Each application may be used once, more than once, or not at all.
NOTE: Each correct match is worth one point.

Answer:
Explanation:

NEW QUESTION: 3
Which three are components of the NetApp Virtual Storage Tier (VST)? (Choose three)
A. Flash Cache
B. Flash Accel
C. Flash Disk
D. Flash Pool
E. Flash IO
Answer: A,B,D
Explanation:
Reference:https://communities.netapp.com/docs/DOC-19016(see figure 1)