SOFE AFE Exam Practice Test Instant Access

Question 1

Spreading of risks among insurance entities is called:

AReinsurance

BSyndication

CConsortium act

DRisk Diffusion

Answer : A

Question 2

The subsequent measurement of the deposits is based upon whether the insurance and reinsurance contract:

Atransfer only significant timing risk

Btransfer only significant underwriting risk

Ctransfer neither significant timing nor underwriting risk

DAll of the above

Answer : D

Question 3

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:

AForward investment plan

BFuture agreement plan

CFuture Contract

DForward Contract

Answer : D

Question 4

What is the act in which the main sections are for Canadian companies and for foreign companies?

AInvestment reimbursement Act

BInsurance Companies Act

CRegulatory Act

DRevenue-earned Act

Answer : B

Question 5

Which of the following is NOT the interrelated component of internal control?

AControl environment

BRisk assessment

CControl activities

DPlanning control

Answer : D

Question 6

Direct serving loans method requires a system of good internal control and requires that the functions be split between the Accounting Department and the Investment Department. In such a case the Accounting Department is responsible for all of the following EXCEPT:

ASupplying the Investment Department with correct data and reports that summarize all loan transactions

BAlerting the Investment Department promptly whenever an exception to the normal processing routine occurs

CThe design, maintenance, and accuracy of accounting records, for periodic management and exception reports, and for statutory statement preparation

DIts records may or may not provide the needed data to support this reporting function

Answer : D

Question 7

The ten largest companies account for what percent of life insurance sales in Canada?

Aless than 50 percent

Bmore than 65 percent

Cmore than 75 percent

Dless than 80 percent

Answer : C

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