AFE Exam Questions
190 real AFE exam questions with expert-verified answers and explanations. Page 2 of 4.
- Question #51
Immunization theory says that:
- Question #52
What is the second-order measure of the interest rate sensitivity of an instrument and the sensitivity of duration to changes in interest rates?
- Question #53
Interest rates are a key element of any option pricing exercise because cash flows are discounted at interest.
- Question #54
Quantifies the sensitivity of the option price to changes in interest rates is known as:
- Question #55
Which of the following is NOT of equity market sensitivities that are usually considered in dynamic hedging?
- Question #56
Which counterparts of duration and convexity are the first- and second-order sensitivities of an equity market instrument to changes in the price of the underlying?
- Question #57
Dynamic hedging requires that:
- Question #58
______ is an agreement between two counterparties to enter into a particular transaction at a specified date in the future at an agreed-upon price.
- Question #59
An instrument that grants the holder the right but not the obligation to buy the underlying asset at a specified strike price is known as:
- Question #60
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:
- Question #61
Which of the following is NOT the Asset/ Liability Management (ALM) activity?
- Question #62
A holistic analysis in a multi-scenario framework of all significant factors that can affect an insurer's future financial condition is called:
- Question #63
A metric is a measurement standard or yardstick for quantifying Asset/Liabilities Management (ALM) risk.
- Question #64
The ten largest companies account for what percent of life insurance sales in Canada?
- Question #65
Which of the following is NOT the category of Life and health insurers in Canada?
- Question #66
Which of the following is the significant requirement for ongoing regulatory reporting to the Office of the Superintendent of Financial Institutions ("OSFI")?
- Question #67
_______ include financial statements and notes, both on a consolidated and non-consolidated basis.
- Question #68
What of the life insurer's is determined by applying factors for risk components to specific on and off-balance sheet assets or liabilities and by adding the results?
- Question #69
What is the act in which the main sections are for Canadian companies and for foreign companies?
- Question #70
The approach in which the investment policy should "identify acceptable ranges for investments in different types of instruments, including cash, equities, bonds and debentures, an...
- Question #71
Investments in equities by a life insurance company may not exceed the total of
- Question #72
A substantial investment is defined as any investment comprising more than 15 percent of an enterprise's voting shares or greater than 35 percent of its equity.
- Question #73
The Appointed Actuary has a responsibility to express an opinion on the appropriateness of certain actuarially determined amounts in the financial statements.
- Question #74
The nature and extent of interest rate risk, credit risk, reinsurance risk and other significant risks should be disclosed is required for:
- Question #75
______________ is considered to be self-sustaining if it is financially and operationally independent of the reporting enterprise.
- Question #76
Principal objectives of state statutes are: to investigate and settle some or all of the
- Question #77
The reason behind, when an insurance entity may request permission from the domiciliary state regulatory authority to use a specific accounting practice in the preparation of its s...
- Question #78
Short-duration contracts provide insurance protection for fixed period and can cancel the contract at the end of any contract period.
- Question #79
The contracts that are not subject to unilateral changes in its provision and requires the performance of various functions and services for an extended period is called:
- Question #80
SAP stresses measurement of emerging earnings of a business from period to period while GAAP stresses measurement of the ability to pay claims in the future.
- Question #81
Audit risk consists of:
- Question #82
The maximum error in the population that the auditor is willing to accept is called:
- Question #83
Which risk assessment procedures are used to obtain an understanding of the entity and its environment, including its internal control?
- Question #84
The profitability of an insurance entity on a statutory basis is generally gauged by:
- Question #85
The combined ratio is the sum of it:
- Question #86
The operating ratio is the combined ratio less than the ratio of investment income, to earned premiums.
- Question #87
The auditor should obtain a sufficient understanding by performing risk assessment procedures to:
- Question #88
A process designed to provide reasonable assurance about the achievement of the entity's objectives with regard to reliability of financial reporting, effectiveness and efficiency...
- Question #89
Which of the following is NOT the interrelated component of internal control?
- Question #90
Which control includes the procedures for system design, including the acquisition of software packages, should encourage active participation by the accounting department and inte...
- Question #91
Final approval should be obtained prior to placing a new system into operation is the activity that can be fall into which control?
- Question #92
An attitude that includes a questioning mind and a critical assessment of audit evidence is called:
- Question #93
Which are the types of misstatements relevant to the auditor's consideration of fraud in a financial statement audit?
- Question #94
Which of the following may NOT involve a high degree of management judgment and subjectivity and may present risks of material misstatement due to fraud?
- Question #95
An estimate due to time lags in the receipt of reports from cendants is called reinsurance.
- Question #96
The auditor responds to risks of material misstatements due to fraud in which of the following ways?
- Question #97
The Module Rule requires the insurer to provide:
- Question #98
The SEC rules clarify that management's assessment and report is limited to internal control over financial reporting.
- Question #99
Audit regulatory is more reliable when it is obtained from knowledgeable independent sources inside the entity.
- Question #100
is provided by original documents is more reliable than audit evidence provided by photocopies or facsimiles.