SOFE Exam AFE Topic 2 Question 94 Discussion

Actual exam question for SOFE's AFE exam

Question #: 94
Topic #: 2

[All AFE Questions]

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 Tarra at Jan 26, 2025, 09:37 AM

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Tiffiny

1 months ago

True, but I still think C) Discount rates is the most important factor to consider.

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Jonelle

1 months ago

I suppose economic flow could also play a role in avoiding double counting.

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Lenny

1 months ago

But what about A) Economic flow? Could that also be a factor?

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Aaron

1 months ago

Economic flow? What is this, a macroeconomics exam? Discount rates are the way to go, my dudes.

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Dorothy

2 days ago

True, we need to make sure our assumptions are consistent to avoid any errors in our analysis.

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Cristal

7 days ago

But don't forget about the inflation effect, that can have a big impact on the cash flows as well.

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Weldon

8 days ago

I agree, discount rates help us account for the time value of money in our analysis.

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Tomoko

22 days ago

Discount rates are definitely important to consider when reflecting assumptions in cash flows.

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Sarina

1 months ago

Inflation effect? That's like trying to catch a greased pig with your bare hands. Discount rates all the way!

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Micah

1 months ago

I agree, discount rates help to avoid double counting or omitting the effects of risk factors.

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Arleen

1 months ago

Discount rates are definitely important to consider when reflecting assumptions in cash flows.

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Truman

2 months ago

Hmm, I'd say the nominal flows are the way to go. Gotta keep it real, you know?

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Nguyet

30 days ago

Definitely, they help keep things consistent and realistic.

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Nickolas

1 months ago

Yeah, I agree. Nominal flows are definitely important to consider.

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Reynalda

1 months ago

D) Inflation effect

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Lura

1 months ago

C) Discount rates

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Bambi

1 months ago

B) Nominal flows

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Layla

1 months ago

A) Economic flow

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Daron

2 months ago

The discount rates, of course! That's the only way to ensure consistency with the cash flows.

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Darrin

28 days ago

Agreed, they help avoid double counting and ensure consistency.

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Marvel

1 months ago

Yes, discount rates are crucial for reflecting assumptions in cash flows.

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Craig

1 months ago

Discount rates

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Tiffiny

2 months ago

I agree with Jonelle, discount rates should reflect assumptions.

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Jonelle

2 months ago

I think the answer is C) Discount rates.

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