SOFE AFE Exam Practice Test Instant Access

Question 1

Coverage of risks that do not fit normal underwriting patterns and that are not commensurate with standard rates is normally refers to as:

ASurplus lines

BCommercial lines

CRisk lines

DStandardized lines

Answer : A

Question 2

Dynamic hedging requires that:

Athe price or value sensitivities of the hedge portfolio and the assets are in alignment

Bthe price or value sensitivities of the hedge portfolio and the liabilities are in alignment

Cthe price or value sensitivities of the hedge portfolio and the expenses are in alignment

Dthe price or value sensitivities of the hedge portfolio and the revenues are in alignment

Answer : B

Question 3

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 4

The entity transferring the risk is called the ceding entity and the entity to which the risk is transferred is called the assuming entity.

ATrue

BFalse

Answer : A

Question 5

Audit regulatory is more reliable when it is obtained from knowledgeable independent sources inside the entity.

ATrue

BFalse

Answer : B

Question 6

The auditor responds to risks of material misstatements due to fraud in which of the following ways?

Aa response that has an overall effect on how the audit is conducted

Ba response to identified risks involving the nature, timing and extent of auditing procedures to be performed

Ca response involving the performance of certain procedures to further address the risk of material misstatement due to fraud involving management override of controls.

DAll of the above

Answer : D

Question 7

is contractual right of recovery that entitles the insurer to any proceeds from the disposal of damaged property for which the claim has been made.

AClaim adjustment

BClaim recovery

CSubrogation

DSalvage

Answer : D

SOFE AFE Accredited Financial Examiner Exam Practice Test