SOFE Exam AFE Topic 2 Question 71 Discussion

Actual exam question for SOFE's AFE exam

Question #: 71
Topic #: 2

[All AFE Questions]

What limits the repurchase price to a stipulated percentage of the face amount of the certificate?

APrice-cap provision

BInvestment provision

CLimit provision

DPar cap provision

Show Suggested Answer

Suggested Answer: D

by Lisha at Mar 18, 2024, 03:47 AM

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Antonio

9 months ago

I think the answer is A) Price-cap provision because it ensures that the repurchase price does not exceed a certain percentage of the certificate's face amount.

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Adria

9 months ago

I see your point, but typically it's the price-cap provision that establishes the maximum repurchase price.

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Apolonia

9 months ago

But isn't it possible that it could also be D) Par cap provision?

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Carmen

9 months ago

I agree with Adria, the price-cap provision sets the limit on repurchase price.

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Adria

9 months ago

I think the answer is A) Price-cap provision.

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Tennie

9 months ago

I see your point, User 3, but I still think A) Price-cap provision makes more sense in this context as it specifically refers to setting a maximum repurchase price.

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