SOFE-CFE Online Practice Questions and Answers

What is that portion of the registration statement which provides principally, transaction oriented information, and which is distributed by securities underwriters to prospective purchasers of the securities being offered for sale?

A. Registrants

B. Prospectus

C. Beneficiary plan

D. Audited income

Almost three quarters of the cases involving expense reimbursement fraud were perpetrated by someone at:

A. Executive level

B. Employee level

C. Owner level

D. Stakeholder level

A fraction analysis is a means of measuring the relationship between two different financial statement amounts.

A. True

B. False

The cutoff date for data used in the estimation of loss and loss expense liabilities is called:

A. valuation date

B. loss reserve date

C. accident date

D. expense adjustment date

____________________ are those premiums arising from policies which an insurer accepts, in part or in whole (as the reinsurer), from another insurance company.

A. Assumed reinsurance premiums

B. Unearned premiums

C. Mortgage Insurance premiums

D. Minimum reserve premiums

Net written premiums are:

A. direct written premiums plus mortgage reinsurance premiums, minus ceded reinsurance premiums

B. direct written premiums plus assumed reinsurance premiums, minus ceded reinsurance premiums

C. written premiums plus insurance premiums, minus ceded reinsurance premiums

D. assumed reinsurance premiums plus credit life insurance premiums, minus depreciated reinsurance premiums

Which of the following is the correct formula to calculate the earned premium?

A. Earned premium = (Policy premium x Unexpired coverage days) / Total number of days in the policy

B. Earned premium = (Interest premium + Unexpired coverage days) / Total number of days in the policy C. Earned premium = (Policy premium x expired coverage days) / Total number of days in the policy

D. Earned premium = (Overhead premium _ Unexpired coverage days) / Total number of days in the policy

A futures contract is an agreement traded on an exchange or contract market to buy, sell, or effect cash settlement based on the performance of an underlying interest.

A. True

B. False

What defines and sets guidelines for the types and percentages of invested assets that insurers are permitted to own?

A. Defined Limits method

B. Investment holder

C. Policy holder

D. Valuation asset method

Under statutory accounting principles, __________________costs are non-admitted assets and are charged directly to earnings, as their respective expense components are incurred.

A. capital adequacy insurance

B. deferred policy acquisition

C. capital loss

D. trading cost acquisition