Exam Code : AFE
Exam Name : Accredited Financial Examiner (AFE)
Vendor Name :
"Financial"
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Accredited Financial Examiner (AFE)
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The options for securities that insurance entities own and can deliver if the options are
exercised by the option buyers are called:
concealed transactions
covered-call options
financial servicing
safekeeping
Insurance entities usually write covered-call options because they consider the premium
received for writing the options to be either:
an economic hedge between a decline in market price and security
a decrease in yield on the underlying risk security
Both A & B
Neither A nor B
What encompasses investment income and gains and losses, as well as custody of investment and recordkeeping?
Valuation data
Verification note
Transaction cycle
Investment evaluation
The evaluation and subsequent purchase or sale of investments is based on the judgment of the entity’s investment and finance committees.
True
False
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:
face value
fair value
market value
transaction value
is the price in a hypothetical transaction at the measurement date in the market in which the reporting entity would transact for the asset or liability
Feasible financial price
Asset/Liability price
Principal price
Exchange price
The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as:
Transfer market
Transport market
Principal market
Turn-around market
The highest and best use of the asset is , if the asset would provide maximum value to market participants principally on the standalone basis.
in-exchange
in-use
in-market
in-sale
The risk that the obligation will not be fulfilled and affects the value at which the liability is transferred is known as:
performance risk
nonperformance risk
hypothetical risk
relocation risk
Valuation technique should be used to measure fair value and is consistent with:
market, income and risk approach
market, performance and cost approach
security, income and risk approach
market, income and cost approach
What uses valuation techniques to convert future amounts to a single present amount?
Risk approach
Market approach
Income approach
Cost approach
The amount that currently would be required to replace the service capacity of an asset is called:
Risk approach
Market approach
Income approach
Cost approach
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.
Valuation technique
Value technique
Investment approach
Accounting corrections
To avoid double counting or omitting the effects of risks factors what should reflect assumptions that are consistent with those inherent in the cash flows?
Economic flow
Nominal flows
Discount rates
Inflation effect
What technique uses a risk-adjusted discount rate and contractual, promised, or most likely cash flows?
Asset/Liability weighted
Fair value
Present value
Discount rate adjustment
Fair quoted techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs.
True
False
What is made on an instrument-by-instrument basis, generally when an instrument is initially recognized in the financial statements?
Election
Disclosure
Eligibility
Discount