SOFE SOFE-AFE Online Practice Questions and Exam Preparation

SOFE SOFE-AFE Online Questions & Answers

• Question 1:

  What is made on an instrument-by-instrument basis, generally when an instrument is initially recognized in the financial statements?

  A. Election
  B. Disclosure
  C. Eligibility
  D. Discount
  A. Election

• Question 2:

  Fair quoted techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs.

  A. True
  B. False
  B. False

• Question 3:

  What technique uses a risk-adjusted discount rate and contractual, promised, or most likely cash flows?

  A. Asset/Liability weighted
  B. Fair value
  C. Present value
  D. Discount rate adjustment
  D. Discount rate adjustment

• Question 4:

  To avoid double counting or omitting the effects of risks factors what should reflect assumptions that are consistent with those inherent in the cash flows?

  A. Economic flow
  B. Nominal flows
  C. Discount rates
  D. Inflation effect
  C. Discount rates

• Question 5:

  A change in _______ or its application is appropriate if the change results in a measurement that is equally or more representative of fair value in the circumstances.

  A. Valuation technique
  B. Value technique
  C. Investment approach
  D. Accounting corrections
  A. Valuation technique

• Question 6:

  The amount that currently would be required to replace the service capacity of an asset is called:

  A. Risk approach
  B. Market approach
  C. Income approach
  D. Cost approach
  D. Cost approach

• Question 7:

  What uses valuation techniques to convert future amounts to a single present amount?

  A. Risk approach
  B. Market approach
  C. Income approach
  D. Cost approach
  C. Income approach

• Question 8:

  Valuation technique should be used to measure fair value and is consistent with:

  A. market, income and risk approach
  B. market, performance and cost approach
  C. security, income and risk approach
  D. market, income and cost approach
  D. market, income and cost approach

• Question 9:

  The risk that the obligation will not be fulfilled and affects the value at which the liability is transferred is known as:

  A. performance risk
  B. nonperformance risk
  C. hypothetical risk
  D. relocation risk
  B. nonperformance risk

• Question 10:

  The highest and best use of the asset is ______________, if the asset would provide maximum value to market participants principally on the standalone basis.

  A. in-exchange
  B. in-use
  C. in-market
  D. in-sale
  A. in-exchange