SOFE Exam SOFA-CFE Topic 7 Question 94 Discussion

Actual exam question for SOFE's SOFA-CFE exam

Question #: 94
Topic #: 7

Insurance companies sometimes issue instruments that have the characteristics of both debt and equity; these instruments are commonly referred to as:

AGeneral notes

BDomiciliary notes

CLong-term bond notes

Dsurplus notes

Show Suggested Answer

Suggested Answer: C

by Portia at Aug 07, 2024, 10:58 AM

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7 days ago

Surplus notes, definitely. I remember learning about these in my insurance law class. They're a unique hybrid instrument.

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15 days ago

I'm not sure, but I think it could also be C) Long-term bond notes because they can have elements of both debt and equity.

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16 days ago

I agree with Daniela, surplus notes make sense for instruments with characteristics of both debt and equity.

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18 days ago

I'm pretty sure these are called surplus notes, but I'm not 100% confident. Gotta love these tricky insurance terms, right?

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20 days ago

I think the answer is D) surplus notes.

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