SOFE Exam AFE Topic 2 Question 46 Discussion

Actual exam question for SOFE's AFE exam

Question #: 46
Topic #: 2

[All AFE Questions]

The value of the capital stock shown in the stock life insurance company's statutory basis balance sheet equals the par value per share multiplied by the number of issued shares. In the case of no-par stock:

AThe stated value per share is used (or liquidation value, for no-par preferred capital stock)

BThe Total value of shares is used (or liquidation value, for par preferred capital stock)

CThe market value per share is used (or liquidation value, for no-par preferred capital stock)

DCapital stock may be sold to the public for an amount greater than par or stated value

Show Suggested Answer

Suggested Answer: B

by Celeste at Sep 22, 2022, 02:32 PM

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Shantell

5 days ago

I believe the answer is D) Capital stock may be sold to the public for an amount greater than par or stated value, as it allows for flexibility in pricing

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Ezekiel

6 days ago

I agree with Cecilia, because for no-par stock, there is no par value to use

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Cecilia

7 days ago

I think the answer is A) The stated value per share is used

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