SOFE SOFE-AFE Online Practice Questions and Exam Preparation

SOFE SOFE-AFE Online Questions & Answers

• Question 131:

  The combined ratio is the sum of it:

  A. loss ratio
  B. expense ratio
  C. dividend ratio
  D. All of the above
  D. All of the above

• Question 132:

  Admitted assets are those specifically prescribed by the NAIC Accounting Practices and Procedures Manual or prescribed or permitted by the various jurisdictions. An admitted asset is defined as having probable future economic benefits. It also has three essential characteristics. Which one of the following is out of those characteristics?

  A. It embodies a probable future benefit which contributes to cash flow
  B. A particular entity can obtain this benefit
  C. The transaction giving rise to entity's right to control the benefit has already occurred
  D. All of these
  D. All of these

• Question 133:

  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 134:

  At the end of each reporting period, unearned premiums are calculated and the change in unearned premiums is recorded as a change or debit to premium income.

  A. True
  B. False
  B. False

• Question 135:

  Reduction for salvage is:

  A. the estimated amount payable by the vendor from the disposition of damaged or recovered property
  B. the actual amount receivable by the claimer from the temperament of damaged property
  C. the actual amount payable by the investor from the disposition of damaged or recovered property
  D. the estimated amount receivable by the insurer from the disposition of damaged or recovered property
  D. the estimated amount receivable by the insurer from the disposition of damaged or recovered property

• Question 136:

  Savvy sales agents, acting in the interests of their clients, instigate surrenders of the original policies and placement with the new insurers, this phenomenon is known as:

  A. Opportunistic act
  B. Contractual minimums
  C. Mortgage backed securities
  D. Disintermediation.
  D. Disintermediation.

• Question 137:

  Which of the following id NOT the kind of Insurance?

  A. Business policies
  B. fire and alliance lines
  C. inland marine
  D. professional liability
  A. Business policies

• Question 138:

  It refers to items such as interest paid on proceeds from the date due to the date actually disbursed, and to interest on premium deposit funds. These interest items are reflected by the increase in reserves or liability, from one year to the next. What is it?

  A. Interest contract funds
  B. Interest on policy
  C. Contract funds
  D. B or C
  D. B or C

• Question 139:

  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: A. Commingling of escrow funds with a company's operating funds

  B. Commingling of escrow funds with a company's liabilities

  C. Commingling of escrow funds with a company's mortgage funds

  D. Commingling of escrow funds with a company's fixed funds

  Correct Answer. A
  A

• Question 140:

  What represent legal agreements between buyers or sellers and represent commitments to buy or sell financial instruments at specified dates and prices?

  A. Future contracts
  B. Present contracts
  C. Accounting contracts
  D. Financial contracts
  A. Future contracts