SOFE SOFE-AFE Online Practice Questions and Exam Preparation

SOFE SOFE-AFE Online Questions & Answers

• Question 171:

  The potential for loss resulting from changes in market interest rates are known as:

  A. Interest rate risk
  B. Interest rate loss
  C. Change rate risk
  D. Change rate loss
  A. Interest rate risk

• Question 172:

  A private agreement to buy or sell a given quantity of an asset such as a currency, interest rate or commodity at a specified future date at a specified price is called:

  A. Forward investment plan
  B. Future agreement plan
  C. Future Contract
  D. Forward Contract
  D. Forward Contract

• Question 173:

  The estimated liability includes the amount of money that will be used for future payments of:

  A. Reported claims to insurer
  B. Claims related to insured events
  C. Claim adjustment expenses
  D. All of the above
  D. All of the above

• Question 174:

  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.

  A. True
  B. False
  A. True

• Question 175:

  The date on which the contract becomes effective is known as _.

  A. policy date
  B. report date
  C. reinsurance date
  D. record date
  A. policy date

• Question 176:

  Changes in payment procedures or changes in the definition of payment date for coding purposes may or may not affect loss reserve developments.

  A. True
  B. False
  B. False

• Question 177:

  ________________ is an agreement between two counterparties to enter into a particular transaction at a specified date in the future at an agreed-upon price.

  A. Future decision
  B. Future agreement
  C. Future contract
  D. Future cost plan
  A. Future decision

• Question 178:

  When securities repurchased under repos commonly have a principal amount that differs from principal amount of the security originally sold under the agreement, is known as:

  A. Splintering act
  B. Breakage
  C. Rollover
  D. None of the above
  B. Breakage

• Question 179:

  What is characterized by liabilities "shorter" than assets, which can lead to the liquidation of assets at depressed values in times of higher than expected interest rates?

  A. Reinvestment risk
  B. Actual interest risk
  C. Capital value risk
  D. None of the above
  C. Capital value risk

• Question 180:

  In many states, a claims-made insurance policy is required to:

  A. contain an extended-reporting clause
  B. provide for purchase, at the policyholder's option
  C. provide for automatic tail coverage
  D. All of the above
  D. All of the above