SOFE AFE Exam Questions - Real Practice Questions for Guaranteed Success

Question 1

A lower net retention level typically would translate into a higher v\variability of reserves.

ATrue

BFalse

Correct : B

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ATrue

BFalse

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Question 2

An increase in loss reserves may lead to offset by a reduction in premiums and a decrease in loss reserves may be a receivable for additional premiums.

ATrue

BFalse

Correct : B

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ATrue

BFalse

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Question 3

Which of the following is Correct?

Athe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Bthe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Cthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Dthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Correct : A

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Athe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Bthe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Cthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Dthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

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Question 4

What represents the amounts needed to provide for the estimated ultimate cost of settling claims relating to insured events that have occurred on or before a particular date?

AIndependent claim adjustment

BPayment of claims

CInsured claim adjustments

DClaim adjustment expenses

Correct : D

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AIndependent claim adjustment

BPayment of claims

CInsured claim adjustments

DClaim adjustment expenses

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Question 5

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date is called:

Aface value

Bfair value

Cmarket value

Dtransaction value

Correct : B

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Aface value

Bfair value

Cmarket value

Dtransaction value

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Master SOFE AFE Exam with Reliable Practice Questions

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