PTFL Exam Questions and Answers

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NEW QUESTION: 1
Which of the following is not correct about the purchasing power parity theory of explaining changes in
exchange rates?
A. Inflationary forces on foreign and domestic currencies will cause the exchange rates to automatically
adjust to ensure that a common currency will have identical or similar purchasing power in each economy
for similar goods.
B. The purchasing power parity theory is presented in both absolute and relative form.
C. Purchasing power of a common currency in different economies for similar products will remain the
same.
D. Interest rates include a premium or discount that ensures purchasing power parity.
Answer: D
Explanation:
Choice "c" is correct. The purchasing power parity theory holds that inflation will cause exchange rates to
automatically adjust to ensure that an equal amount of a common currency will purchase similar goods in
separate economies. The International Fischer effect considers the premium or discount on interest rates
as an indicator of inflation. Choice "a" is incorrect. The basic idea underlying the purchasing power parity
theory is that the purchasing power of a common currency in different economies for similar products will
remain the same and that inflation in any particular economy will cause exchange rates to adjust until
parity is consistently achieved. Choice "b" is incorrect. The purchasing power parity theory holds that
inflationary forces on foreign and domestic currencies will cause the exchange rates to automatically
adjust to ensure that a common currency will have identical or similar purchasing power in each economy
for similar goods. Choice "d" is incorrect. The purchasing power parity theory is presented as both an
absolute theory of parity determination regardless of market imperfections and as a relative concept that
considers market imperfections.

NEW QUESTION: 2
In Risk Management, how is the term "likelihood" related to the concept of "threat?"
A. Likelihood is a possible threat-source that may exploit a vulnerability.
B. Likelihood is the likely source of a threat that could exploit a vulnerability.
C. Likelihood is the probability that a threat-source will exploit a vulnerability.
D. Likelihood is the probability that a vulnerability is a threat-source.
Answer: C
Explanation:
The ability to analyze the likelihood of threats within the organization is a critical step in building an effective security program. The process of assessing threat probability should be well defined and incorporated into a broader threat analysis process to be effective.
References:
http://www.mcafee.com/campaign/securitybattleground/resources/chapter5/whitepaper-on- assessing-threat-attack-likelihood.pdf


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