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  • Exam Code: ISO-22301-Lead-Auditor
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NEW QUESTION: 1
Wendall Wayne is a fixed income portfolio manager with Skyline Investments. Until recently he has focused almost exclusively on residential mortgage-backed securities (MBS). However, two weeks ago he was given approval to begin purchasing asset-backed securities (ABS) and commercial MBS as well.
Wayne has forecasted that interest rates will decrease by approximately 100 basis points over the next month.
Wayne first completes an analysis of two tranches (a PAC I tranche and a support tranche) from a collateralized mortgage obligation (CMO) that was issued 18 months ago. When the CMO was issued, the initial collar of the PAC I tranche was 150 - 400 PSA. He estimates the change in the average life of each tranche as the prepayment speed varies, assuming the prepayment speed stays at that speed until the tranche matures. The results are shown in Exhibit 1.

In his report, Wayne makes the following statements regarding the CMO:
Statement 1: The CMO is structured so that the support tranche has more extension risk, and the PAC I tranche has more contraction risk.
Statement 2: The cash flows of the PAC I tranche will be less affected by the change in interest rates I have forecast than the cash flows of the support tranche.
Wayne has pushed for approval to begin trading ABS because he is particularly interested in collateralized debt obligations (CDOs). However, he doesn't know a lot about them, so he first does some reading and prepares some key points related to CDOs to guide his analysis.
Statement 3: CDOs are typically collateralized by emerging market bond issues, home equity bank loans, and high-yield corporate bond issues.
Statement 4: One advantage of issuing a synthetic CDO versus a cash CDO is that credit risk is lower with a synthetic CDO because the junior note holders also sell a credit default swap.
Statement 5: Some CDOs include an equity tranche to provide payment and credit protection to the senior and mezzanine tranches, but for most issues, credit protection is provided by external credit enhancements.
Wayne wants to understand the distinction between amortizing and non-amortizing assets that are securitized by ABS transactions, as well as the appropriate spread measures to use for various types of fixed-income securities. He asks a colleague, Martin Freed, to explain to him the difference between the two and how the payment structure of the ABS is affected by whether the assets in the pool are amortizing or non-amortizing. Freed replies:
Statement 6: An auto loan is an example of an amortizing asset, and a credit card receivable is an example of a non-amortizing asset.
Statement 7: For amortizing assets, the composition of the loans in the asset pool doesn't change once the assets are securitized. For non-amortizing assets, the composition of the asset pool does change.
Freed also tells Wayne that the credit analysis of commercial mortgage-backed securities (CMBS) should focus on the credit risk of the property, not the borrower. Freed also says that two key ratios useful for assessing the credit risk of the property are the debt service coverage ratio (net operating income/debt service) and the loan-to-value ratio (current mortgage amount/current appraised value). Wayne concludes that both of the ratios Freed recommends for credit analysis of CMBS are positively related to credit risk:
the higher the ratio, the more risky the loan.
Finally, Wayne is trying to determine the most appropriate spread measure for valuing callable corporate bonds and high-quality home equity loan ABS. He plans to choose from the following measures: the zero- volatility spread, the OAS from the binomial model, and the OAS from the Monte Carlo model.
Which of the two tranches (XX or YY) is most likely the support tranche, and what is the effective collar of the PAC 1 tranche?
Support tranche ;Effective collar of PAC 1 tranche
A. YY ;100-300 PSA
B. XX ;100-300 PSA
C. XX ;0-400 PSA
Answer: B
Explanation:
Explanation/Reference:
Explanation:
CMOs are structured so that the prepayment risk (as measured by the average life variability) is lower for the PAC I tranche than the support tranche. The average life of Tranche YY in Exhibit 1 is constant at 5.1 over a relatively large range of prepayment speeds (100 - 300 PSA). Therefore, Tranche YY is the PAC I tranche, and the effective collar of the PAC I tranche (the range of prepayment speeds over which rhe average life of the tranche is constant) is 100 - 300 PSA. Tranche XX has a much higher average life variability, so it must be the support tranche. (Study Session 15, LOS 55.h,i)

NEW QUESTION: 2
Solutions Architect는 블루 / 그린 배포 방법론을 사용하여 AWS Elastic Beanstalk 내의 애플리케이션 환경을 업데이트 해야 합니다. Solutions Architect는 기존 애플리케이션 환경과 동일한 환경을 생성하고 애플리케이션을 새 환경에 배포합니다.
업데이트를 완료하려면 다음에 무엇을 해야 합니까?
A. 녹색 환경을 가리 키도록 DNS 레코드를 업데이트합니다.
B. Auto Scaling 시작 구성 교체
C. Amazon Route 53을 사용하여 새 환경으로 리디렉션
D. 스왑 환경 URL 옵션을 선택합니다.
Answer: D
Explanation:
https://docs.aws.amazon.com/elasticbeanstalk/latest/dg/using-features.CNAMESwap.html

NEW QUESTION: 3
Where can you find the link that you need to install the Eclipse plug-ins for SAP Cloud Platform?
A. On
the Eclipse website at http://eclipse.org
B. On SAP Store
C. In the downloads area of SAP Community
D. On the SAP Development Tools page on https://tools.hana.ondemand.eom/#cloud
Answer: D

NEW QUESTION: 4

A. Option D
B. Option A
C. Option B
D. Option C
Answer: D

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