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NEW QUESTION: 1
Which of the following statements are true:
I. Capital adequacy implies the ability of a firm to remain a going concern II. Regulatory capital and economic capital are identical as they target the same objectives III. The role of economic capital is to provide a buffer against expected losses IV. Conservative estimates of economic capital are based upon a confidence level of 100%
A. I, III and IV
B. I and III
C. III
D. I
Answer: D
Explanation:
Explanation
Statement I is true - capital adequacy indeed is a reference to the ability of the firm to stay a 'going concern'.
(Going concern is an accounting term that means the ability of the firm to continue in business without the stress of liquidation.) Statement II is not true because even though the stated objective of regulatory capital requirements is similar to the purposes for which economic capital is calculated, regulatory capital calculations are based upon a large number of ad-hoc estimates and parameters that are 'hard-coded' into regulation, while economic capital is generally calculated for internal purposes and uses an institution's own estimates and models. They are rarely identical.
Statement II is not true as the purpose of economic capital is to provide a buffer against unexpected losses.
Expected losses are covered by the P&L (or credit reserves), and not capital.
Statement IV is incorrect as even though economic capital may be calculated at very high confidence levels, that is never 100% which would require running a 'risk-free' business, which would mean there are no profits either. The level of confidence is set at a level which is an acceptable balance between the interests of the equity providers and the debt holders.

NEW QUESTION: 2
While attempting to create a user in the Samba database, the following message appeared:
Exhibit: image002.jpg
Select the correct explanation for why this error occurred:
A. The account user synchronization of Samba and Linux was not properly done
B. The user john must be created in the Linux environment before it can be added to the Samba database
C. The SAM_ACCOUNT script could not be started properly because the user running the smbpasswd command does not have enough permissions
D. The Samba database is not compatible with the Linux backend
Answer: B

NEW QUESTION: 3
Which type of contract gives both the seller and the buyer flexibility to deviate from performance with financial incentives?
A. Cost Plus Incentive Fee (CPIF)
B. Time and Material (T&M)
C. Cost Pius Award Fee (CPAF)
D. Fixed Price Incentive Fee (FPIF)
Answer: D

NEW QUESTION: 4
Which two protocols are used by the management plane in a Cisco IOS device? (Choose two.)
A. PAP
B. NTP
C. TLS
D. 3DES
E. CHAP
F. FTP
G. DHCP
H. NETFLOW
I. IKEv2
Answer: F,H