SOFE Exam AFE Topic 1 Question 82 Discussion

Actual exam question for SOFE's AFE exam

Question #: 82
Topic #: 1

[All AFE Questions]

Which of the following is Correct?

Athe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Bthe financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

Cthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Dthe financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Show Suggested Answer

Suggested Answer: B

by Luz at Aug 08, 2024, 09:07 PM

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7 days ago

I think the answer is A.

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