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4352 TEST 1 QUIZ 1 QUESTIONS &
ANSWERS(RATED A+)
Harry and Alice, both age 55, plan to retire at age 60. They have three children: Pete, age 32, a computer technician living in Atlanta; Sidney, age 30, a doctor who resides in Indianapolis; and Mark, age 25, a web designer, who is married and lives in Chicago. They also have three grandchildren. Most likely, in what phase in the financial life cycle are Harry and Alice? A) Conservation phase B) Distribution phase C) Gifting phase D) Asset accumulation phase - ANSWERA **Which of the following is an obligation the CFP® certificant has to her current clients? To maintain competence in all areas of financial planning To advise of any certification suspension or revocation she received from CFP Board To be in compliance with applicable regulatory requirements governing professional services provided To provide reasonable and practical professional supervision to any subordinate or third party to whom she assigns responsibility for any client services A) II, III, and IV B) III only C) III and IV D) I, II and IV - ANSWERA A CFP® professional who has monitoring and updating responsibilities must communicate to a client which of the following factors? Which actions, products, and services are and are not subject to the CFP® professional's monitoring responsibility How and when the CFP® professional will monitor the actions, products, and services How frequently the CFP® professional will update and change the client's financial goals each year How and when the CFP® professional will update the financial planning recommendations A) I and II B)
I, II, and IV C) I and III D) II and IV - ANSWERB **Which of the following information you may obtain from a client is the best example of qualitative information? A) Whether he has executed a living will B) The amount of annual income he requires for retirement purposes C) The amount of his monthly net cash flow D) Whether he considers himself to be an experienced investor - ANSWERD A client who has become more concerned about losing what she has than in accumulating more is in which financial life cycle phase? A) Distribution/gifting phase B) Asset accumulation phase C) Conservation/protection phase D) Preretirement phase - ANSWERC Which of the following uses of the CFP® certification marks is CORRECT? John Doe, C.F.P. John Doe, a CFP John Doe, CERTIFIED FINANCIAL PLANNER™ John Doe, CFP® A) III and IV B) II and IV C) IV only D) I and III - ANSWERA **Identify the steps included CFP Board's Practice Standards for the Financial Planning Process. Mutually Defining the Terms Presenting Goals Establishing and Defining the Client-Planner Relationship Developing the Financial Planning Recommendation(s) A) IV only
Asset accumulation phase D) Distribution/gifting phase - ANSWERA Which of the following are major components of a sound financial plan? Estate planning Insurance planning Retirement planning Investment planning A) I and III B) I and IV C) I, III, and IV D) I, II, III, and IV - ANSWERD Which of the following types of data are considered qualitative? Health status List of current investments Copies of wills and trusts Risk tolerance level A) I and IV B) III and IV C) I, II, and III D) II and III - ANSWERA To properly use the CFP® marks on documents or marketing materials, certain guidelines must be followed. Identify the items that are required when the words "CERTIFIED FINANCIAL PLANNER™" are used. Always use capital letters or small cap font Always use the ™ symbol Always associate with CFP Board Always use with one of CFP Board's approved nouns ("certificant," "professional," "practitioner," "certification," "mark" or "exam") unless directly following the name of the individual certified by CFP Board A) I and II B) I and III C) I, II, and IV D) II and IV - ANSWERC
Identify the number of steps in the Practice Standards for the Financial Planning Process. A) Eight B) Six C) Fifteen D) Seven - ANSWERD Which of the following are roles of the financial planner? Analyzing the client's current financial status Recommending strategies that will meet the planner's business goals Assisting the client in implementing the financial plan Providing documentation the financial planner needs to complete the financial plan A) I, II, and III B) I and III C) I, III, and IV D) II and IV - ANSWERB Which of the following activities would be appropriate if you were establishing and defining the client-planner relationship or gathering information necessary to fulfill the engagement? Determining which stocks to purchase for the client's investment portfolio Inquiring about the number of dependents Collecting personal financial information Inquiring about the age or dates of birth of dependents A) I only B) I and III C) II, III, and IV D) II and IV - ANSWERC Which activity that takes place during the financial planning process is generally the most demanding? A) Communicating the recommendations B) Gathering information necessary to fulfill the engagement C) Analyzing and evaluating the client's current financial status D)
Which of the following uses of the CFP® marks is CORRECT? A) Taylor Smith, CFP B) Taylor Smith, CERTIFIED FINANCIAL PLANNER® C) Taylor Smith, a CERTIFIED FINANCIAL PLANNER D) Taylor Smith, CFP® - ANSWERD A financial planner does which of the following when establishing and defining the client-planner relationship? Fully explains how the planner will be compensated Advises the client that the planner will determine how the recommendations will be implemented Discusses expectations regarding the roles of each party Discusses the duration of the relationship A) I, III, and IV B) I, II, III, and IV C) II and III D) I and IV - ANSWERA Which of the following statements regarding the financial planning process is CORRECT? As the client-planner relationship is established and developed, the financial planner fully explains the services to be provided, the amount of compensation, and the source of compensation. Financial plan recommendations should always be monitored on a monthly basis because circumstances may change. A) Neither I nor II B) II only C) Both I and II D) I only - ANSWERD Analyze the list to determine CFP Board's approved nouns to use following "CERTIFIED FINANCIAL PLANNER™." professional certificant candidate test
A)
I and II B) II, III, and IV C) I only D) I, II, III, and IV - ANSWERA A client is usually in what phase of the financial life cycle until approximately age 45 or later if the client's children are not yet independent? A) Gifting phase B) Conservation, or protection, phase C) Asset accumulation phase D) Distribution phase - ANSWERC Assume you have a new financial planning client. Arrange the following tasks you would perform during the financial planning process with this client, in their logical order, from first to last. Review the client's financial plan and evaluate changes in the legal, tax, or economic environment. Discuss the terms of the engagement and compensation with the client. Prepare appropriate alternative recommendations to meet the client's financial goals. Collect the client's financial records. A) IV, II, I, III B) II, IV, I, III C) I, III, II, IV D) II, IV, III, I - ANSWERD Which phase of the financial life cycle lasts until approximately age 45 or later if the client's children are not yet independent? A) Distribution phase B) Asset accumulation phase C) Conservation, or protection, phase D) Gifting phase - ANSWERB Personal and financial circumstances within the life cycle are influenced by all of the following except A)
