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NEW QUESTION: 1
In a virtual router, which object contains all potential routes?
A. FIB
B. MIB
C. RIB
D. SIP
Answer: C
Explanation:
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NEW QUESTION: 2
A borrower pays a floating rate on a loan and wishes to convert it to a position where a fixed rate is paid.
Which of the following can be used to accomplish this objective?
I. A short position in a fixed rate bond and a long position in an FRN
II. An long position in an interest rate collar and long an FRN
III. A short position in a fixed rate bond and a short position in an FRN IV. An interest rate swap where the investor pays the fixed rate
A. None of the above
B. I and IV
C. I, II and IV
D. II and III
Answer: C
Explanation:
Explanation
A short position in a fixed rate bond and a long position in an FRN has the effect of paying fixed and receiving floating. The floating received offsets the floating payment on the borrowing, leaving the borrower with just a fixed rate outflow. Therefore the combination identified in statement I can be used to achieve the objective of paying fixed.
A collar is equivalent to a long position in an interest rate cap combined with a short position in an interest rate floor. This has the effect of setting a range within which the investor's borrowing rate will vary. In the case where the cap and floor rates are the same, the combination of a collar and a long FRN effectively produces an outcome where the holder of such positions pays a fixed rate. Therefore, an interest rate collar can be used to convert the fixed payment to a floating rate payment. [Example: Assume current interest rate is 3%, and therefore the borrower has a liability of 3% on the FRN. Assume that the borrower now buys a collar at the strike rate of 4%. Now the borrower receives 0% (=Max(3 % - 4%, 0)) on the cap part of the collar, and pays 1% on the floor part of the collar (=Max(4% - 3%, 0)). The net borrowing cost therefore is 3% paid on the FRN plus 1% paid on the collar, equal to 4%. Now if interest rates rise to say 6%, the borrower pays 6% on the FRN, and receives 2% from the collar (=Max(6% - 4%, 0) - Max(4% - 6%, 0)), creating a net cost of 6% - 2% = 4%.
A collar is often issued with an FRN to convert floating flows to fixed. Therefore combination II is an acceptable choice.
A short position in a fixed rate bond and a short position in an FRN produces a cash flow that does not produce a net fixed cash outflow when combined with the borrowing. Therefore statement III is not a valid combination.
An interest rate swap where the investor pays fixed and receives floating, when combined with a floating payment on an FRN leaves a net fixed payment, Therefore statement IV is a valid way to achieve the borrower's objective.

NEW QUESTION: 3
A network administrator enables OSPF on an HP Provision ASIC switch and creates area 0 and area 1.
The network administrator then enters this command:
Switch(ospf)# area 1 range 10.1.0.0/16
After other switches are configured and establish adjacencies, how will this command affect the final
behavior of the switch?
A. The switch will send a single summary LSA into the backbone area for all networks in the 10.1.0.0/16 range.
B. The switch will send advertisements for networks within the 10.1.0.0/16 range into the backbone area.
C. The switch will send and accept OSPF messages on VLAN interfaces with the 10.1.0.0/16 range.
D. The switch will become an area border router (ABR) capable of advertising summary LSAs.
Answer: A