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SOFE
AFE Designation
AFE
Accredited Financial Examiner Questions and Answers

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Viewing page 5 out of 9 pages

Viewing questions 41-50 out of questions

Questions # 41:

What is derived from its future cash flows, adjusted for risk as well as any other relevant economic characteristics?

Options:

Financial value

Future cost value

Liability fair value

Statutory cost value

Answer

Questions # 42:

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?

Options:

Reinvestment risk

Actual interest risk

Capital value risk

None of the above

Answer

Questions # 43:

A company that has its loans serviced, for whatever reason, is usually charged a servicer’s fee. This fee is usually expressed:

Options:

As an annual fraction of a percentage of each interest payment

As an annual fraction of a percent of the principal balance of the loans or based on a percentage of each interest payment

As a monthly fraction of a percent of the principal balance of the loans or based on a percentage of each interest payment

As a monthly fraction of a percentage of each interest payment

Answer

Questions # 44:

The pro rata portion of premiums written allocable to unexpired policy periods represents unearned premiums, which are reflected as in the balance sheet.

Options:

Liabilities

Expenses

Revenues

None of the above

Answer

Questions # 45:

Risk retention group is:

Options:

A public entity formed by the members of the public pool primarily to provide business risk competency to the members.

A business entity formed by the members of the private pool primarily to provide commercial asset insurance to the members.

An insurance entity formed by the members of the private pool primarily to provide commercial liability insurance to the members.

An insurance entity formed by the members of the public pool primarily to provide commercial expense insurance to the members.

Answer

Questions # 46:

Generally, Participation income is an income stream due the company and is based upon the financial results of the borrower and/or borrowing business entity. Although it can take several forms, the more prominent ones are:

Options:

Participation in revenue generated by the mortgaged property above a specified sum, such as a percentage of gross sales in excess of a specified dollar volume

Participation in profits from the mortgaged property, such as a percentage of gross income less defined expenses

Percentage of gross sales in excess of a specified dollar volume

percentage of net sales in excess of a specified dollar volume

Answer

A, B

Questions # 47:

What features a reserve that accumulates at company declared credited interest rates, which are periodically reset?