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NEW QUESTION: 1
When are data validation rules executed?
A. Before records are imported
B. Using the Data Loader and/or other API tools
C. A User Saves a Record
Answer: A,B,C

NEW QUESTION: 2
XYZ Corp. has operations in the U.S. and Canad
a. Within Canada, it has two separate Divisions due to Statutory requirements: one in Quebec and another in Ontario.
How would you define the organization structure for XYZ Corp. from the information given above?
A. two Ledgers, three Legal Entities, and two Operating Units
B. two Ledgers, two Legal Entities, and two Operating Units
C. two Ledgers, three Legal Entities, and three Operating Units
D. three Ledgers, three Legal Entities, and three Operating Units
E. two Ledgers, two Legal Entities, and three Operating Units
Answer: C

NEW QUESTION: 3
Eugene Price, CFA, a portfolio manager for the American Universal Fund (AUF), has been directed to pursue a contingent immunization strategy for a portfolio with a current market value of $100 million. AUF's trustees are not willing to accept a rate of return less than 6% over the next five years. The trustees have also stated that they believe an immunization rate of 8% is attainable in today's market. Price has decided to implement this strategy by initially purchasing $100 million in 10-year bonds with an annual coupon rate of 8.0%, paid semiannually.
Price forecasts that the prevailing immunization rate and market rate for the bonds will both rise from 8% to
9% in one year.
While Price is conducting his immunization strategy he is approached by April Banks, a newly hired junior analyst at AUF. Banks is wondering what steps need to be taken to immunize a portfolio with multiple liabilities. Price states that the concept of single liability immunization can fortunately be extended to address the issue of immunizing a portfolio with multiple liabilities. He further states that there are two methods for managing multiple liabilities. The first method is cash flow matching which involves finding a bond with a maturity date equal to the liability payment date, buying enough in par value of that bond so that the principal and final coupon fully fund the last liability, and continuing this process until all liabilities are matched. The second method is horizon matching which ensures that the assets and liabilities have the same present values and durations.
Price warns Banks about the dangers of immunization risk. He states that it is impossible to have a portfolio with zero immunization risk, because reinvestment risk will always be present. Price tells Banks,
"Be cognizant of the dispersion of cash flows when conducting an immunization strategy. When there is a high dispersion of cash flows about the horizon date, immunization risk is high. It is better to have cash flows concentrated around the investment horizon, since immunization risk is reduced." Given Price's forecast for interest rates in one year, the dollar safety margin, assuming coupons are reinvested at 8% semiannually, will be closest to:
A. $3.10 million.
B. $31.29 million.
C. $7.58 million.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
After one year, the value of the portfolio is the price of the bond plus accumulated interest. The price of the bond is computed as follows:
FV - 100; N = 18; I/Y = 4.5; PMT = 4; CPT → PV = 93.92
The accumulated value of the coupon payments is the compounded value of the first coupon at 4% (= 8% /
2) for one 6-month period plus the value of the second coupon payment received at the end of the first year, or:
4 (1.04) + 4 = 4.16 + 4 = $8.16
Thus, the value of the portfolio after one year is 93.92 + 8.16 « 102.08, or $102.08 million.
The required terminal value is $100 million (1.03)10 = $134.39 million.
The portfolio value necessary to achieve the required terminal value at the prevailing immunization rate of
9%. compounded semiannually, over the four remaining years, is:
134.39 million / (1.045)8 = $94.50 million
So, the dollar safety margin is: $102.08 million - $94.50 million = $7.58 million. (Study Session 9, LOS 29.i)

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