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NEW QUESTION: 1
Satish Dhawan, a veteran fixed income trader is conducting interviews for the post of a junior fixed income trader. He interviewed four candidates Adam, Balkrishnan, Catherine and Deepak and following are the answers to his questions.
Question 1: Tell something about Option Adjusted Spread
Adam: OAS is applicable only to bond which do not have any options attached to it. It is for the plain bonds.
Balkishna: In bonds with embedded options, AS reflects not only the credit risk but also reflects prepayment risk over and above the benchmark.Catherine: Sincespreads are calculated to know the level of credit risk in the bound, OAS is difference between in the Z spread and price of a call option for a callable bond.
Deepark: For callable bond OAS will be lower than Z Spread.
Question 2: This is a spread that must be added to the benchmark zero rate curve in a parallel shift so that the sum of the risky bond's discounted cash flows equals its current market price. Which Spread I am talking about?
Adam: Z Spread
Balkrishna: Nominal Spread
Catherine: Option Adjusted Spread
Deepark: Asset Swap Spread
Question 3: What do you know about Interpolated spread and yield spread?
Adam: Yield spread is the difference between the YTM of a risky bond and the YTM of an on-the-run treasury benchmark bond whose maturity is closest, but not identical to that of risky bond. Interpolated spread is the spread between the YTM of risky bond and the YTM of same maturity treasury benchmark, which is interpolated from the two nearest on-the-run treasury securities.
Balkrishna: Interpolated spread is preferred to yield spread because the latter has the maturity mismatch, which leads to error if the yield curve is not flat and the benchmark security changes over time, leading to inconsistency.
Catherine: Interpolated spread takes account the shape of the benchmark yield curve and therefore better than yield spread.
Deepak: Both Interpolated Spread and Yield Spread rely on YTM which suffers from drawbacks and inconsistencies such as the assumption of flat yield curve and reinvestment at YTM itself.
Then Satish gave following information related to the benchmark YTMs:
An investor decides to invest in the bond futures and has an outlook that the term structure curve would steepen. What should be his trading strategy?
A. Sell futures on short-maturity underlying, Buy futures on long-maturity underlying
B. Buy futures on short-maturity underlying, Buy futures on long-maturity underlying and Sell futures on middle-maturity underlying
C. Sell futures on short-maturity underlying, Sell futures on long-maturity underlying and Buy futures on middle-maturity underlying.
D. Buy futures on short-maturity underlying, Sell futures on long-maturity underlying.
Answer: A
NEW QUESTION: 2
A. Option C
B. Option B
C. Option D
D. Option A
Answer: D
NEW QUESTION: 3
Which of the following is a potential advantage of using Storage as a Service?
A. Decrease in IT management of the platform
B. Increase in encryption technologies
C. In-house IT staff controls all data
D. Data is accessible when the Internet is not functioning
Answer: A
NEW QUESTION: 4
민첩한 접근 방식으로 IT 프로젝트를 관리하고 있습니다. 이 프로젝트에는 요구 사항이 자주 변경되었습니다. 이 프로젝트는 또한 예산이 엄격합니다. 프로젝트의 테스트 단계에 있으며 고객이 새로운 기능을 추가로 요청했습니다. 팀의 트리플 제약 조건에 대한 변경의 영향을 평가 한 결과 변경으로 원래 예산이 3,000 달러 증가했습니다. 그러나 고객이 추가 예산이 없다고 말했는데 다음 단계는 무엇입니까?
A. 추가 예산을 제공하기 위해 고객과 협상하십시오.
B. 원래 합의 된 가격이므로 고객에게 전체 비용을 청구합니다.
C. 고객과 협상하여 프로젝트 범위를 줄이거 나 새 기능을 추가하지 마십시오.
D. 고객이 추가 예산 제공을 거부했기 때문에 작업을 중지합니다.
Answer: C
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