SOFE
AFE · Question #46
AFE Question #46: Real Exam Question with Answer & Explanation
The correct answer is A. to pay another party to assume a stream of contingent expenses, for a premium over the expected cost. See the full explanation below for the reasoning.
Question
Reinsurance is defines as:
Options
- Ato pay another party to assume a stream of contingent expenses, for a premium over the expected cost
- Bto pay another party to assume a stream of contingent revenues, for an interest over the expected cost
- Cto sell another party to assume a stream of contingent assets, for a premium over the actual cost
- Dto sell another party to assume a stream of contingent expenses, for a discount over the expected cost
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