SOFE Exam AFE Topic 1 Question 92 Discussion

Actual exam question for SOFE's AFE exam

Question #: 92
Topic #: 1

To avoid double counting or omitting the effects of risks factors what should reflect assumptions that are consistent with those inherent in the cash flows?

AEconomic flow

BNominal flows

CDiscount rates

DInflation effect

Show Suggested Answer

Suggested Answer: C

by Pura at Dec 06, 2024, 05:25 PM

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Rodrigo

3 days ago

But what about inflation effect? Shouldn't that also be considered?

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Jesusita

6 days ago

I agree with Lisha, discount rates should reflect assumptions to avoid double counting.

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Lisha

10 days ago

I think the answer is C) Discount rates.

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Twanna

12 days ago

Oof, this one's a toughie. But I'm gonna go with B) Nominal flows. Gotta keep those numbers nice and clean, you know?

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Val

15 days ago

D) Inflation effect sounds like the right choice to me. You gotta consider the impact of inflation on those cash flows, am I right?

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Mariko

18 days ago

I think the answer is C) Discount rates. The discount rates used should be consistent with the assumptions inherent in the cash flows to properly account for the effects of risk factors.

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