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Avaya 71801X exam
  • Exam Code: 71801X
  • Exam Name: Avaya Certified ICT Professional - Wireless Local Area Network- Planning and Optimizing Enterprise WLAN
  • Version: V12.35
  • Q & A: 280 Questions and Answers
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You need to identify which Software Assurance benefit provides the best return on investment (ROI) for the IT department.
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Refer to the exhibit.

A router receiving BGP routing updates from multiple neighbors for routers in AS 690. What is the reason that the router still sends traffic that is destined to AS 690 to a neighbor other than
A. The local preference value in another neighbor statement is higher than 250.
B. The route map is applied in the wrong direction.
C. The weight value in another neighbor statement is higher than 200.
D. The local preference value should be set to the same value as the weight in the route map.
Answer: B

Mark Stober, William Robertson, and James McGuire are consultants for a regional pension consultancy.
One of their clients, Richard Smitherspoon, chief investment officer of Quality Car Part Manufacturing, recently attended a conference on risk management topics for pension plans. Smitherspoon is a conservative manager who prefers to follow a long-term investment strategy with little portfolio turnover.
Smitherspoon has substantial experience in managing a defined benefit plan but has little experience with risk management issues. Smitherspoon decides to discuss how Quality can begin implementing risk management techniques with Stober, Robertson, and McGuire. Quality's risk exposure is evaluated on a quarterly basis.
Before implementing risk management techniques, Smitherspoon expresses confusion regarding some measures of risk management. "I know beta and standard deviation, but what is all this stuff about convexity, delta, gamma, and vega?" Stober informs Smitherspoon that delta is the first derivative of the call-stock price curve, and Robertson adds that gamma is the relationship between how bond prices change with changing time to maturity.
Smitherspoon is still curious about risk management techniques, and in particular the concept of VAR. He asks, "What does a daily 5% VAR of $5 million mean? I just get so confused with whether VAR is a measure of maximum or minimum loss. Just last month, the consultant from MinRisk, a competing consulting firm, told me it was 'a measure of maximum loss, which in your case means we are 95% confident that the maximum 1-day loss is $5.0 million." McGuire states that his definition of VAR is that
"VAR is a measure that combines probabilities over a certain time horizon with dollar amounts, which in your case means that one expects to lose a minimum $5 million five trading days out of every 100." Smitherspoon expresses bewilderment at the different methods for determining VAR. "Can't you risk management types formulate a method that works like calculating a beta? It would be so easy if there were a method that allowed one to just use mean and standard deviation. I need a VAR that I can get my arms around." The next week, Stober visits the headquarters of TopTech, a communications firm. Their CFO is Ralph Long, who prefers to manage the firm's pension himself because he believes he can time the market and spot upcoming trends before analysts can. Long also believes that risk measurement for TopTech can be evaluated annually because of his close attention to the portfolio. Stober calculates TopTech's 95% surplus at risk to be S500 million for an annual horizon. The expected return on TopTech's asset base (currently at S2 billion) is 5%. The plan has a surplus of $100 million. Stober uses a 5% probability level to calculate the minimum amount by which the plan will be underfunded next year.
Regarding the statements on delta and gamma, are Stober and Robertson correct or incorrect?
A. Only Robertson is correct.
B. Both are correct -OR- both are incorrect.
C. Only Stober is correct.
Answer: C
Stober is correct, and Robertson is incorrect.
Gamma is the second derivative of the change in the underlying asset price movements. Stober correctly defines delta. (Study Session 14, LOS 40.c)


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