American Bankers Association Exam CTFA Topic 11 Question 60 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 60
Topic #: 11

[All CTFA Questions]

Which investments held by life insurance enterprises should be carried in the balance sheet at amortized cost?

AAppraisal-term acts

BVariable-term portfolio

CFixed-term portfolio

DRevenue-earned portfolio

Show Suggested Answer

Suggested Answer: C

by Teddy at Mar 11, 2024, 01:32 AM

Limited Time Offer

25%

Off

Get Premium CTFA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Quinn

6 months ago

That makes sense, Odette. Amortized cost helps account for the time value of money and avoids volatility in reported earnings.

upvoted 0 times

...

Odette

6 months ago

I believe fixed-term portfolio investments should be carried at amortized cost because they are intended to be held until maturity.

upvoted 0 times

...

Andra

6 months ago

I agree with Quinn. It's important to accurately reflect the value of these investments on the balance sheet.

upvoted 0 times

...

Quinn

6 months ago

I think the investments held by life insurance enterprises should be carried at amortized cost.

upvoted 0 times

...

Lon

6 months ago

I don't think so, variable-term investments are more likely to have fluctuating values.

upvoted 0 times

...

Lyda

7 months ago

But what about variable-term portfolio? Couldn't that also be carried at amortized cost?

upvoted 0 times

...

Kirk

7 months ago

I agree, amortized cost is more suitable for fixed-term investments.

upvoted 0 times

...

Lon

7 months ago

I think it's the fixed-term portfolio.

upvoted 0 times

...

Kirk

7 months ago

Do you know which investments life insurance companies should carry at amortized cost?

upvoted 0 times

...