SOFE AFE Exam Questions Instant Access - No Installation Required

Question 1

The return on an instrument over a period of time is a combination of the cash flow it generates and the change in its value.

ATrue

BFalse

Answer : A

Question 2

Investments in equities by a life insurance company may not exceed the total of

A70 percent of the insurance company's regulatory capital

B15 percent of the liabilities in respect of non-participating policies

C25 percent of the liabilities in respect of participating policies

DAll of the above

Answer : D

Question 3

Which of the following is the significant requirement for ongoing regulatory reporting to the Office of the Superintendent of Financial Institutions (''OSFI'')?

AThe monthly Return

BCapital Adequacy Return

CConstraints of Sound Business

DStatic Capital Adequacy Test

Answer : B

Question 4

The process of analyzing and projecting the trends of a company's capital position given its current circumstances, its recent past, and its intended business plan under a variety of future scenarios is called:

APermanence and Reliability Testing

BDynamic Capital Adequacy Testing

CCapital Market Testing

DNone of the above

Answer : B

Question 5

Asset/Liability Management recognizes that the financial impact of an asset or liability is mainly realized through its:

ARevenues

BCash flows

CExpenses

DInvestments

Answer : B

Question 6

Accounting for escrow funds is difficult because of the large number of transactions related to such funds. A separate bank account or a trust bank account may be opened, with all escrow receipts deposited into it to prevent:

ACommingling of escrow funds with a company's operating funds

BCommingling of escrow funds with a company's liabilities

CCommingling of escrow funds with a company's mortgage funds

DCommingling of escrow funds with a company's fixed funds

Answer : A

Question 7

Insurance policies may be classified in which of the following categories?

ABy policy planning

BBy type of risks coverage

CBy kind of insurance underwritten

DAll of the above

Answer : C

SOFE Accredited Financial Examiner AFE Exam Questions