SOFE Exam AFE Topic 2 Question 72 Discussion

Actual exam question for SOFE's Accredited Financial Examiner exam

Question #: 72
Topic #: 2

[All Accredited Financial Examiner Questions]

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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Roxane

8 days 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

10 days 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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France

11 days 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

12 days 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

14 days 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

16 days 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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