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NEW QUESTION: 1
Exhibit:
Referring to the exhibit, which two statements are true? (Choose two.)
A. The route-distinguisher configuration stops routes from being shared between CE-1 and CE-2.
B. The vrf-target configuration allows routes to be shared between CE-1 and CE-2.
C. The route-distinguisher configuration allows routes to be shared between CE-1 and CE-2.
D. The vrf-target configuration stops routes from being shared between CE-1 and CE-2.
Answer: C,D
NEW QUESTION: 2
A. 0
B. 1
C. 2
D. 3
Answer: B,C
Explanation:
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NEW QUESTION: 3
If an institution has $1000 in assets, and $800 in liabilities, what is the economic capital required to avoid insolvency at a 99% level of confidence? The VaR in respect of the assets at 99% confidence over a one year period is $100.
A. 0
B. 1
C. 2
D. 3
Answer: B
Explanation:
Explanation
The economic capital required to avoid insolvency is just the asset VaR, ie $100. This means that if the worst case losses are realized, the institution would need to have a buffer equivalent to those losses which in this case will be $100, and this buffer is the economic capital.
The actual value of liabilities is not relevant as they are considered 'riskless' from the institution's point of view, ie they will be taken at full value. In this particular case, the institution has $200 in capital which is more than the economic capital required.
Therefore Choice 'c' is the correct answer.