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NEW QUESTION: 1
If F be the face value of a firm's debt, V the value of its assets and E the market value of equity, then according to the option pricing approach a default on debt occurs when:
A. F > V
B. F - E < V
C. F < V
D. V < E
Answer: A
Explanation:
Explanation
According to the option pricing approach developed by Merton, the shareholders of a firm have a put on the assets of the firm where the strike price is equal to the face value of the firm's debt. This is just a more complicated way of saying that the debt holders are entitled to all the assets of the firm if these assets are insufficient to pay off the debts, and because of limited liability of the shareholders of a corporation this part payment will fully extinguish the debt.
A firm will default on its debt if the value of the assets falls below the face value of the debt. Therefore Choice
'a' is the correct answer. All other choices are incorrect.
(There are two ways to consider this sort of optionality, and I have mentioned only one for this question:
1. The equity holders can sell the assets of the firm to the debt holders at a price equal to the face value of the debt, ie a put. (ie they can extinguish their liability to the debt holders in full by handing them the assets of the firm, effectively selling them the assets at the value of the debt)
2. The equity holders have a long position in a call option where they can keep the assets of the firm by paying a price equal to the face value of the debt (ie, they can pay off the debt holders and keep the assets) For this question, perspective 1 applies but you should be aware of the second one too as a question may reference that view point.)

NEW QUESTION: 2
You have built a transaction model to identify possible duplicate charges between invoicing and expense credit cards. The model logic already includes two standard filters that identify amounts and suppliers that are the same or similar, as shown:

Which additional date filter will further refine the set of duplicate charges found?
A. The "Payables Invoice" object's "Invoice Date" attribute is similar to the "Expense Report Credit Card Transaction" object's "Transaction Date" attribute within +/- 10 days.
B. The "Expense Report Credit Card Transaction" object's "Transaction Date" attribute is not blank.
C. The "Expense Report Credit Card Transaction" object's "Last Updated Date" attribute is greater than the "Relative Value" of 3 months.
D. The "Payables Invoice" object's "Invoice Date" attribute is greater than the "Expense Report Credit Card Transaction" object's "Transaction Date" attribute.
Answer: A

NEW QUESTION: 3
An enterprise is trying to secure a specific web-based application by forcing the use of multifactor authentication.
Currently, the enterprise cannot change the application's sign-in page to include an extra field.
However, the web-based application supports SAML. Which of the following would BEST secure the application?
A. Using an SSO application that supports mutlifactor authentication
B. Forcing higher-complexity passwords and frequent changes
C. Deploying Shibboleth to all web-based applications in the enterprise
D. Enabling the web application to support LDAP integration
Answer: C

NEW QUESTION: 4
How are resources in RT CORBA categorized? (Choose two.)
A. communication
B. object
C. memory
D. process
Answer: A,D