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Exam Code: C_HRHPC_2311
Exam Name: SAP Certified Application Associate - SAP SuccessFactors for Employee Central Payroll 2H/2023
Vendor: SAP

60 Questions & Answers
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Security analysts Andrew Tian, CFA, and Cameron Wong, CFA, are attending an investment symposium at the Singapore Investment Analyst Society. The focus of the symposium is capital market expectations and relative asset valuations across markets. Many highly-respected practitioners and academics from across the Asia-Pacific region are on hand to make presentations and participate in panel discussions.
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Ruiz concluded his presentation with the data in the tables below to illustrate factors that should be considered during the decision-making process for portfolio managers who are evaluating investments in emerging markets.


With regard to Ruiz's statements concerning emerging market risk, when an economic crisis spreads from one country to other countries in the area, this is known as:
A. contagion, and non-normality of returns precludes the use of non-parametric models to estimate risk.
B. macro transmission, and non-normality of returns makes it more difficult to estimate risk using parametric models.
C. contagion, and non-normality of returns makes it more difficult to estimate risk using parametric models.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
When an economic crisis, such as that which began in Thailand in 1997, spreads to other countries, this is known as contagion. The fact that emerging market asset returns may exhibit greater non-normality makes it more difficult to apply parametric models (e.g., those based upon the statistical concepts of mean and standard deviation). In such instances, the analyst should consider non-parametric approaches such as bootstrapping techniques and Monte Carlo simulation to estimate risk. (Study Session 6, LOS 23.k)


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