Free SOFE SOFA-CFE Exam Practice Questions & Explanations

Last updated on: Oct 11, 2026
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Question 1

A swap is an agreement between two or more parties to exchange payments based on the performance of underlying interests.

Answer Options
Correct Answer: A
Question 2

The internal audit function typically focuses on:

Answer Options
Correct Answer: D
Question 3

Gains and losses are recognized for tax purposes until they are realized.

Answer Options
Correct Answer: B
Question 4

If the subsidiary subsequently reports gross income, the insurer resumes applying the equity method only after its share of that gross income equals the share of net losses not recognized during the period that the equity method was suspended.

Answer Options
Correct Answer: B
Question 5

The annual reports from certain insurers to their shareholders must conform to specific SEC disclosure requirements. According to the Securities and Exchange Commission (SEC), which of the following information must be provided?

Answer Options
Correct Answer: D