8005 Exam Questions and Answers

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A portfolio manager purchases a floating rate mortgage backed security that would
currently provide a 4% yield to the company. Since mortgage rates have been fluctuating significantly over the past month, the manager is thinking about entering into an interest rate swap to hedge against the rate movements. Although the manager would remove most of the price sensitivity of the asset by executing the swap, it would also lower the total yield on the investment due to swapcosts. What objective in the company investment policy is guiding the portfolio manager's decision?
A. Preservation of principal
B. Performance measurement
C. Risk/return trade off
D. Risk analysis
Answer: C

What is the function of the HPOM open message interface?
A. to integrate other monitor applications by accessing the message stream
B. to forward messages from the management server to notification or trouble ticket systems
C. to allow command line configuration of message policies
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PDF Format eBook

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