SOFE Exam AFE Topic 2 Question 81 Discussion

Actual exam question for SOFE's AFE exam

Question #: 81
Topic #: 2

[All AFE Questions]

Revenue risk is defined as:

Athe general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets

Bthe general administrative costs of investors include components that must necessarily vary with the level of the equity markets

Cthe particular administrative costs of insurers include components that must necessarily vary with the level of the equity markets

Dthe general administrative costs of investors include components that do not vary with the level of the equity markets

Show Suggested Answer

Suggested Answer: A

by Diane at Jul 13, 2024, 03:51 PM

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Lanie

3 months ago

I thought revenue risk was all about the insurance company's ability to generate hilarious revenue streams, like a stand-up comedy night at the office. Guess I was way off base on that one.

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Donte

1 months ago

D) the general administrative costs of investors include components that do not vary with the level of the equity markets

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Nathalie

2 months ago

C) the particular administrative costs of insurers include components that must necessarily vary with the level of the equity markets

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Effie

2 months ago

A) the general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets

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Ma

3 months ago

Definitely C. The administrative costs of insurers have to adapt to the changing market conditions, which is the essence of revenue risk.

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Major

2 months ago

Yes, C makes sense. It's important for insurers to manage their administrative costs based on market fluctuations to mitigate revenue risk.

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Latia

2 months ago

I agree, C is the correct option. Revenue risk is all about how administrative costs of insurers are affected by market changes.

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Jamie

3 months ago

I'm going to go with A. The general administrative costs of insurers include fixed components that don't fluctuate with the equity markets.

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Alyce

3 months ago

Hmm, I'm not sure about this one. D seems plausible, as investor administrative costs may not necessarily vary with the equity markets.

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Afton

2 months ago

I agree, D seems like the most logical choice.

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Fabiola

2 months ago

D) the general administrative costs of investors include components that do not vary with the level of the equity markets

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Cristal

2 months ago

I think it's not A, because it's about insurers, not investors.

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Janey

2 months ago

A) the general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets

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Ilda

3 months ago

I think the correct answer is C. The administrative costs of insurers, such as claims processing and customer service, are directly influenced by the level of the equity markets.

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Thurman

3 months ago

Hmm, that's an interesting perspective. I can see how both options could be valid depending on the context.

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Corrie

3 months ago

I disagree, I believe revenue risk is defined as the general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets.

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Thurman

4 months ago

I think revenue risk is defined as the general administrative costs of investors include components that must necessarily vary with the level of the equity markets.

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