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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Brande

2 months ago

Ha! Surplus notes, easy. Although, sometimes I feel like these insurance exams are just a game of 'Guess the Obscure Term'.

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Angelica

2 months ago

Surplus notes, no doubt about it. Although, I'd love to know who comes up with these names. 'Surplus notes' sounds like something you'd find in the attic, not a financial instrument.

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Shawnee

23 days ago

That makes sense, it's all about balancing risk and capital.

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Eugene

25 days ago

I think it's because they represent the surplus of the insurance company's assets over its liabilities.

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Lezlie

29 days ago

I agree, 'surplus notes' does sound a bit strange.

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Lynelle

3 months ago

Hmm, I want to say surplus notes, but I can't help but think there's a trick here. Insurance companies love to throw curveballs, don't they?

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Corrinne

2 months ago

Surplus notes make sense to me as well, but let's think it through just in case.

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Shoshana

2 months ago

I've heard of surplus notes before, so I'm leaning towards that option.

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Britt

2 months ago

I think it's surplus notes too, but you're right, insurance companies can be tricky.

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Anglea

3 months ago

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

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Ressie

1 months ago

It's interesting how they can help insurers manage their risk exposure.

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Noah

1 months ago

I think they offer a good balance between debt and equity financing.

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Lorrine

2 months ago

They provide a way for insurance companies to raise capital in a different way.

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Rosio

3 months ago

I agree, surplus notes are a fascinating concept.

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Shala

3 months 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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Tayna

3 months ago

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

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Vicente

3 months 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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Gianna

2 months ago

Surplus notes can be confusing, but once you understand them, it makes sense.

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Filiberto

2 months ago

I've heard of surplus notes before, they definitely have characteristics of both debt and equity.

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Jamie

2 months ago

Yeah, surplus notes sound familiar to me too.

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Kristel

2 months ago

I think you're right, they are called surplus notes.

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Daniela

3 months ago

I think the answer is D) surplus notes.

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