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NEW QUESTION: 1
The rate of dividend on a stock goes up. What is the effect on the price of a put option on this stock?
A. It does not affect the value of the put
B. It decreases the value of the put
C. It may affect the put value either way depending upon the risk-free rate
D. It increases the value of the put
Answer: D
Explanation:
Explanation
Everything else remaining the same, an increase in the rate of dividends causes the value of call options to fall and the value of put options to rise. Therefore, Choice 'b' is the correct answer. (In the exam, the question could address either a call or a put option, so be aware of the answer in either case).
To understand this, consider how dividends are accounted for when valuing an option using the Black Scholes model. Future dividends are discounted to the present using the risk free rate and this discounted value is reduced from the spot price used in the BSM valuation. Effectively, this reduces the spot price used in the BSM formula. When the spot price reduces, and the exercise price remains the same, then the value of the call option goes down. In the same way, when spot price is reduced by the present value of dividends (and the exercise price stays the same), obviously the put option becomes more valuable. Therefore an increase in the rate of dividends increases the value of the put option.
There is another intuitive way to think about this: A call option is like a long position in the stock, but the holder of the call option is not entitled to receive dividends (unlike the holder of the stock). Since the holder of the call option has to forego the dividends, he is willing to pay less for the option; or in other words, the value of the call reduces.
In the same way, a put option is like having a short position in the stock. The holder of the short position has to borrow the stock in order to get into the short position in the first place. When dividends are paid, the holder of the short stock position has to make good any dividends that might be paid to the lender of the stock. The holder of a put option does not have to make any such payments. Therefore the put option is more valuable, and the existence of dividends (or an increase in dividends) increases the value of the put option.
(Try this out using the Black Scholes Excel model given under the tutorials by varying the spot price.)

NEW QUESTION: 2
You have created a Rule Base for firewall, websydney. Now you are going to create a new policy package with security and address translation rules for a second Gateway. What is TRUE about the new package's NAT rules?
Exhibit:

A. Only rule 1 will appear in the new package.
B. NAT rules will be empty in the new package.
C. Rules 1, 2, 3 will appear in the new package.
D. Rules 4 and 5 will appear in the new package.
Answer: C

NEW QUESTION: 3
How many zone sets can be active in a fabric at a single time?
A. two
B. one
C. unlimited
D. three
Answer: B

NEW QUESTION: 4
You deploy a new Microsoft Azure SQL database instance to support a variety of mobile application and public websites. You configure geo-replication with regions in Brazil and Japan.
You need to implement real-time encryption of the database and all backups.
Solution: you enable Dynamic Data Masking on the primary replica.
Does the solution meet the goal?
A. No
B. Yes
Answer: A
Explanation:
Explanation
SQL Database dynamic data masking does not encrypt the data.
Transparent Data Encryption (TDE) would provide a solution.
Note: SQL Database dynamic data masking limits sensitive data exposure by masking it to non-privileged users.
Dynamic data masking helps prevent unauthorized access to sensitive data by enabling customers to designate how much of the sensitive data to reveal with minimal impact on the application layer.
References:
https://azure.microsoft.com/en-us/blog/how-to-configure-azure-sql-database-geo-dr-with-azure-key-vault/

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