Pearson AFE New Attempt

Page: 3 / 10

Question 12

Which of the following is the significant requirement for ongoing regulatory reporting to the Office of the Superintendent of Financial Institutions (“OSFI”)?

Options:

The monthly Return

Capital Adequacy Return

Constraints of Sound Business

Static Capital Adequacy Test

Question 13

Tax Act states that:

Options:

A life insurer is subject to an investment income tax of 15 percent on its ‘net Canadian life investment income

A life insurer is subject to an investment income tax of 25 percent on its ‘net Canadian life investment income

A life insurer is subject to an investment income tax of 35 percent on its ‘net Canadian life investment income

A life insurer is subject to an investment income tax of 45 percent on its ‘net Canadian life investment income

Question 14

Which of the following is NOT the way to make changes in variables that can be considered in the loss reserving process?

Options:

selection of loss projection

adjustment of historical loss data

separate calculation of effect of variables

segregation of new data

Question 15

Prepayment of a conventional mortgage loan, prior to its specified maturity, is discouraged through the general market acceptance of significant prepayment penalties. Often these penalties are calculated so that when prevailing market interest rates are:

Options:

Lower than the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially “made whole” for a potential loss of interest.

Greater than the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially “made whole” for a potential loss of interest.

Equal to the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially “made whole” for a potential loss of interest.

Lower than the rate of interest being paid to the borrower has to make up the interest rate differential and the lender is essentially “made whole” for a potential loss of interest.

Page: 3 / 10