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NEW QUESTION: 1
For each of the following statements, select Yes if the statement is true. Otherwise, select No. NOTE: Each correct selection is worth one point.
Answer:
Explanation:
Explanation
YES
YES
YES
NEW QUESTION: 2
Ein IS-Prüfer stellte fest, dass eine Änderung einer kritischen Berechnung in die Produktionsumgebung übernommen wurde, ohne getestet zu werden. Welche der folgenden Methoden ist der BESTE Weg, um sicherzustellen, dass die Berechnung korrekt funktioniert?
A. Befragen Sie den leitenden Systementwickler.
B. Überprüfen Sie die regelmäßige Ausführung des Berechnungsstapeljobs.
C. Holen Sie die Genehmigung nach dem Wechsel vom Management ein.
D. Führen Sie inhaltliche Tests mit computergestützten Audittechniken (CAATs) durch.
Answer: B
NEW QUESTION: 3
A bank extends a loan of $1m to a home buyer to buy a house currently worth $1.5m, with the house serving as the collateral. The volatility of returns (assumed normally distributed) on house prices in that neighborhood is assessed at 10% annually. The expected probability of default of the home buyer is 5%.
What is the probability that the bank will recover less than the principal advanced on this loan; assuming the probability of the home buyer's default is independent of the value of the house?
A. More than 1%
B. 0
C. Less than 1%
D. More than 5%
Answer: C
Explanation:
Explanation
The bank will not be able to recover the principal advanced on this loan if both the home buyer defaults, and the house value falls to less than $1m, ie the price moves adversely by more than $500k, which is
$-500k/$150k = -3.33. (Note that 150k is the 1 year volatility in dollars, ie $1.5m * 10%).
The probability of both these things happening together is just the product of the two probabilities, one of which we know to be 5%. The other is also certainly a small number, and intuitively it is clear that the probability of both the things happening together will be less than 1%.
For a more precise answer, we can calculate the probability of the house price falling by 3.33 standard deviations by calculating the area under the standard normal curve to the left of -3.33. This indeed is a very small number (actually equal to NORMSINV(-3.33)=0.00043), which when multiplied by the probability of default of the home buyer at 5% is certainly going to be less than 1%. Therefore Choice 'b' is the correct answer.
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