SOFE AFE Exam - Topic 3 Question 106 Discussion

Actual exam question for SOFE's AFE exam

Question #: 106
Topic #: 3

When securities repurchased under repos commonly have a principal amount that differs from principal amount of the security originally sold under the agreement, is known as:

ASplintering act

BBreakage

CRollover

DNone of the above

Show Suggested Answer

Suggested Answer: B

by Mireya at Nov 21, 2025, 11:33 AM

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Cristen

3 months ago

I’m with C) Rollover. It’s a common term in finance.

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Karol

3 months ago

Breakage makes sense. It’s about the difference in amounts.

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Noel

3 months ago

D) None of the above could be a trick option.

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Talia

3 months ago

A) Splintering act? Never heard of that.

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Ezekiel

3 months ago

I think it's B) Breakage. Sounds right.

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Theodora

3 months ago

Just to clarify, it's B) Breakage.

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Steffanie

4 months ago

Wait, is this really a thing? Sounds odd.

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Tresa

4 months ago

Definitely Breakage, no doubt.

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Justine

4 months ago

I thought it was Rollover!

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Hollis

5 months ago

It's called Breakage, right?

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Una

5 months ago

I'm going with B) Breakage. Anything else would just be breaking the repo, am I right?

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Lenna

5 months ago

Haha, "Splintering act"? What kind of made-up term is that? Definitely not the right answer.

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Dorian

5 months ago

B) Breakage, easy peasy. Who comes up with these trick questions anyway?

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Lizbeth

5 months ago

Hmm, I'm not sure about this one. I'll have to go with C) Rollover just to be different.

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Raul

5 months ago

D) None of the above? Really? That can't be right. It's definitely B) Breakage.

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Pok

6 months ago

I think the answer is B) Breakage. That's the term used when the principal amounts differ.

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Alishia

6 months ago

I don't think it's "splintering act," but I'm not confident about the other options either. I should have gone over those definitions again.

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Angella

6 months ago

This sounds familiar, but I keep mixing up "rollover" and "breakage." I wish I had reviewed those terms more closely.

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Angella

6 months ago

Breakage, that's the one! I'm pretty confident that's the correct term for when the principal amounts differ in a repo transaction. Time to move on to the next question.

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Jenelle

6 months ago

Ugh, I'm a bit lost on this one. Repurchase agreements can get pretty complex. I'll have to make an educated guess and hope for the best.

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Patrick

6 months ago

Ah, I remember learning about this in class. I think it has to do with the principal amount not matching between the original sale and repurchase. Let me double-check that.

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Nickole

7 months ago

I remember practicing a question about repos, and I think "breakage" was mentioned in that context, but I can't recall if it was the right answer.

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Mona

7 months ago

I think this might be related to how repos can involve different amounts, but I'm not entirely sure which term applies.

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Gladis

7 months ago

I lean towards C) Rollover. It fits the context.

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Norah

8 months ago

Okay, let's see. I know repos involve the sale and repurchase of securities, so this is likely related to that. I'll have to review my notes on the specific terminology.

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