sofe sofa-cfe practice test

Exam Title: Certified Financial Examiner Exam

Last update: Nov 27 ,2025
Question 1

All investments with remaining maturities (or repurchase dates under repurchase agreements) of
one year or less at the time of acquisition are called:

  • A. Insured investments
  • B. Long-term investments
  • C. Short-term investments
  • D. Cash investments
Answer:

C

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Question 2

What represents balances due from brokers when a security has been sold, but the proceeds have
not been received?

  • A. Payable for securities
  • B. Receivable for securities
  • C. Security balancing
  • D. Premium security
Answer:

B

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Question 3

Balances due within thirty days of the settlement date are included as a receivable for securities.

  • A. True
  • B. False
Answer:

B

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Question 4

When the insurer or the intermediary may prepare a monthly recapitulation of premium and
commission transactions between the parties, commonly called:

  • A. account current
  • B. account reimbursement
  • C. balance share
  • D. premium debts
Answer:

A

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Question 5

What include balances due from the insurer’s brokers (collectively referred to as agents’ balances)
for premium on policies written?

  • A. collected premiums
  • B. account premiums
  • C. Direct balance
  • D. Agents’ balances
Answer:

D

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Question 6

The asset classification of funds held by or deposited with reinsured companies occurs when:

  • A. the reporting entity has assumed insurance from only one insurer that owes it funds, according to the payment agreement.
  • B. the reporting entity has assumed reinsurance from one or more other insurers that owe it funds, according to the reinsurance agreement.
  • C. the reporting entity has assumed reinsurance necessarily from more then one insurers that owe it funds, according to the interest charges.
  • D. the reporting entity has assumed authority from one or more other insurers that owe it funds, according to the deposited funds.
Answer:

B

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Question 7

Which payments reflect the amount of reinsurance recoverable from reinsurers based upon the
amounts paid by the ceding company under reinsured policies?

  • A. loss adjustment expense
  • B. premium expense
  • C. payment assessment expense
  • D. All of the above
Answer:

A

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Question 8

Admissibility test must be applied to determine the amount of deferred tax asset (DTAs) that can be
admitted is called:

  • A. Maximum DTA
  • B. Minimum DTA
  • C. Net DTA
  • D. Gross DTA
Answer:

D

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Question 9

Which software must be established as a non-admitted asset and written off over a period not to
exceed the lesser of the useful life of the software or five years.

  • A. Non-reliable system
  • B. Non-secure system
  • C. Non-operating system
  • D. Non-expensed system
Answer:

C

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Question 10

Income earned as of the reporting date but not legally due to be paid to the reporting entity until
subsequent to the reporting date is known as:

  • A. Investment income accrued
  • B. Interest income
  • C. Real state income
  • D. Investment income depreciated
Answer:

A

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