SOFE Exam AFE Topic 2 Question 72 Discussion

Actual exam question for SOFE's AFE exam

Question #: 72
Topic #: 2

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date is called:

Aface value

Bfair value

Cmarket value

Dtransaction value

Show Suggested Answer

Suggested Answer: B

by Laticia at Apr 08, 2024, 06:25 PM

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Lashaunda

5 months ago

I believe it's B) fair value because it represents the price that would be received in an orderly transaction.

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Rory

5 months ago

But could it also be C) market value? I'm not sure.

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Titus

6 months ago

I agree with Amy, fair value makes sense in this context.

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Kizzy

7 months ago

I think the answer is B) fair value.

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Roxane

7 months ago

Good point! A) face value is definitely not the right answer here. That's more like the value printed on a bond or something, not the actual transaction price.

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Chantell

7 months ago

Haha, I'm just picturing some of these options. A) face value? Really? Who would sell an asset for its face value in an orderly transaction?

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Armando

6 months ago

C) market value seems more reasonable

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Joni

6 months ago

Definitely not A) face value, that's for sure!

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Bronwyn

6 months ago

B) fair value

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France

7 months ago

Hmm, I don't think C) market value is quite right. Market value implies an active, open market, whereas the question is talking about a specific transaction between participants.

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Ammie

7 months ago

Ah, I see what you mean. But what about C) market value? Isn't that also a valid answer, since it's the price the asset would sell for in the market?

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Rhea

7 months ago

I agree, B) fair value seems like the most logical choice. The question is talking about the price that would be received in an orderly transaction, which is the definition of fair value.

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Wynell

8 months ago

Hmm, this is a tricky one. I'm pretty sure the right answer is B) fair value, but I want to hear what the others think before I commit to that.

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