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NEW QUESTION: 1
Which components does HMAC use to determine the authenticity and integrity of a message? (Choose two.)
A. The password
B. The key
C. The transform set
D. The hash
Answer: B,D
Explanation:
In cryptography, a keyed-hash message authentication code (HMAC) is a specific type of message authentication code (MAC) involving a cryptographic hash function and a secret cryptographic key. It may be used to simultaneously verify both the data integrity and the authentication of a message.
Source:
https://en.wikipedia.org/wiki/Hash-based_message_authentication_code
NEW QUESTION: 2
Factor Analytics Capital Management makes portfolio recommendations using various factor models.
Mauricio Rodriguez, a Factor Analytics research analyst, is examining the prospects of two portfolios, the FACM Century Fund (CF) and the FACM Esquire Fund (EF).
The variance of returns are identical for the two funds. The estimates in Exhibit 1 were derived for CF and EF using monthly data for the past five years.
Supervisor Barbara Woodson asks Rodriguez to use the Capita! Asset Pricing Model (CAPM) and a multifactor model (APT) to make a decision to continue or discontinue the EF fund. The two factors in the multifactor model are not identified. To help with the decision, Woodson provides Rodriguez with the capital market forecasts in Exhibit 2.
After examining the prospects for the EF portfolio, Rodriguez derives the forecasts in Exhibit 3.
Rodriguez also develops a 2-factor macroeconomic factor model for the EF portfolio. The two factors used in the model are the surprise in GDP growth and the surprise in Investor Sentiment. The equation for the macro factor model is:
During an investment committee meeting, Woodson makes the following statements related to the 2-factor macroeconomic factor model.
Statement 1: An investment combination in CF and EF that provides a GDP growth factor beta equal to one and an Investor Sentiment factor beta equal to zero will have lower active factor risk than a tracking portfolio consisting of CF and EF.
Statement 2: When markets are in equilibrium, no combination of CF and EF will produce an arbitrage opportunity In their final meeting, Rodriguez informs Woodson that the CF portfolio consistently outperformed its benchmark over the past five years. Rodriguez makes the following comments to Woodson: "The consistency with which CF outperformed its benchmark is amazing. The difference between the CF monthly return and its benchmark return was nearly always positive and varied little over time." Using the market model estimates for CF and EF, which fund has higher:
Systematic risk? Unsystematic risk?
A. CF ;EF
B. CF ;CF
C. EF ;CF
Answer: C
Explanation:
Explanation/Reference:
Explanation:
The slope of the market model is the beta. Systematic risk is high for high beta funds. From Exhibit 1, the market beta is lower for CF (0.70) versus EF (1.50). Unsystematic risk is measured by the variance of the market model error (e). The information provided in the vignette states that the variances are identical for CF and EF. We can determine which fund has larger unsystematic risk by using the market model formula for the variance:
because the bera is smaller for CF versus EF. The vignette states
that the variances for CF and EF are identical. Therefore, if the total variances are identical, and if the first component is smaller for CF versus EF, then the second component (unsystematic risk) must be larger for CF versus EF. (Study Session 18, LOS 64.f,g)
NEW QUESTION: 3
A data transform in the PurchaseOrder-Work class uses the Set action to set a value for the property BillingState on the Customer page. The value is MA. The Customer page is specified on the Pages & Classes tab of the data transform rule form. Which one of the following describes how to specify the row in the rule form for accomplishing this Set action without any errors or warnings upon saving the rule form? (Choose One)
A. Select Set in the Action column, enter Primary.BillingState in the Target column, and enter MA in the Source column
B. Select Set in the Action column, enter Customer.BillingState in the Target column, and enter MA in the Source column
C. Select Set in the Action column, enter Customer.BillingState in the Target column, and enter "MA" in the Source column
D. Select Set in the Action column, enter Primary.BillingState in the Target column, and enter "MA" in the Source column
Answer: C
NEW QUESTION: 4
Which of the following statements describes an auditor's obligation to identify deficiencies in the design or
operation of internal control?
A. The auditor should design and apply tests of controls to discover significant deficiencies in internal
control that could result in material misstatements.
B. The auditor need not search for significant deficiencies in internal control but should document and
communicate any such deficiencies that are discovered.
C. The auditor need not search for significant deficiencies in internal control unless management requests
an attestation that "no significant deficiencies in internal control were noted in the audit."
D. The auditor should search for significant deficiencies in internal control if the auditor expects that
controls are operating effectively (i.e., if the auditor plans to rely on controls).
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "D" is correct. The auditor need not search for significant deficiencies in internal control, but should
document and communicate any such deficiencies that are discovered.
Choice "A" is incorrect. Tests of controls are designed and applied to evaluate the risk of financial
statement misstatement, and to determine the nature, timing, and extent of substantive tests to be
performed. They are not designed to discover significant deficiencies in internal control.
Choice "B" is incorrect. Searching for significant deficiencies in internal control is not part of an audit, and it
would be inappropriate for the auditor to state that no significant deficiencies in internal control were noted
(even if management requested such a statement).
Choice "C" is incorrect. Searching for significant deficiencies in internal control is not part of an audit even
if the auditor expects that controls are operating effectively (i.e., expects to rely on controls).
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