SOFE Exam AFE Topic 1 Question 86 Discussion

Actual exam question for SOFE's AFE exam

Question #: 86
Topic #: 1

[All AFE Questions]

When securities repurchased under repos commonly have a principal amount that differs from principal amount of the security originally sold under the agreement, is known as:

ASplintering act

BBreakage

CRollover

DNone of the above

Show Suggested Answer

Suggested Answer: B

by Louisa at Sep 18, 2024, 09:19 AM

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Kerrie

6 months ago

I'm not sure, but I think it might be B) Breakage because it sounds like something related to differences in principal amounts.

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Cammy

6 months ago

I agree with Raelene, because rollover is when the principal amount differs in repos.

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6 months ago

D. None of the above? Really? I'm pretty sure there's a specific term for this situation. Hmm, let me think...

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Elmira

5 months ago

C) Rollover

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Alyce

5 months ago

B) Breakage

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Celia

5 months ago

A) Splintering act

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Vince

6 months ago

I think the answer is B. Breakage. It makes sense that the principal amount would differ in a repo transaction.

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Cherilyn

6 months ago

Yes, in a repo transaction, the principal amount can differ. It's called Breakage.

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Bettina

6 months ago

I agree, the answer is B) Breakage.

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