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NEW QUESTION: 1
The effectiveness of a hedge is determined by:
A. the alpha coefficient of the linear regression between the asset being hedged and the hedge
B. the beta coefficient of the linear regression between the asset being hedged and the hedge
C. the correlation between the asset being hedged and the asset being used as a hedge
D. the correlation and standard deviation of the hedge asset
Answer: C
Explanation:
Explanation
The effectiveness of the hedge is solely determined by the correlation between the position being hedged, and the position being used as the hedge. A hedge can be perfect when correlation is 1, and will be less than perfect when it is anything other than 1.The effectiveness of the optimal hedge is given by the formula (1-2), where is the correlation between the two. Therefore Choice 'a' is the correct answer. Standard deviations affect the hedge ratio, not the effectiveness of the hedge.
(Note: In other texts, hedge effectiveness is explained to be measured by , which is essentially the same as (1-
2), both expressions being functions of . You can use either, being aware that one measures the variance explained, and the other is a measure of the unexplained variance.)

NEW QUESTION: 2
Which step is automatically performed in Asset Accounting when you perform the year-end balance carry forward?
A. The depreciation run (program FAA_DEPRECIATION_POST) for period 12 ot the fiscal year is triggered.
B. The plan/actual variance is calculated tor the annual capital expense reporting on statistical cost elements (type 90).
C. The year-end closing (program RAJABS00) is executed and the previous previous fiscal year is closed.
D. The depreciation tor the new year is calculated and maintained per asset in table FAAT_PLAN VALUES.
Answer: A

NEW QUESTION: 3
What happens when you activate a request in a standard DataStore object (DSO)?
There are 3 correct answers to this question. Choose:
A. Record are updated in the Active Data table
B. Records are compressed in the Active Data table
C. Records are updated in the Change Log table
D. Records are aggregated in the Change Log table
E. Records are deleted from the activation queue
Answer: A,C,E

NEW QUESTION: 4

A. Encrypted data transfer
B. Prime integer
C. Random prime Integer
D. Random number
Answer: C