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ChFC HS300 FP:PROCESS AND ENVIRONMENT > FINANCIAL PLANNING A-F > Flashcards

FINANCIAL PLANNING A-F Flashcards

1
Q

ABOVE-THE-LINE DEDUCTIONS

A

DEDUCTIONS FOR ADJUSTED GROSS INCOME, ALSO KNOWN AS ADJUSTMENTS TO INCOME

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2
Q

ACCURACY-RELATED PENALTY

A

A PENALTY OF 20% OF THE UNDERPAYMENT AMOUNT IMPOSED ON TAXPAYERS WHO FILE INCORRECT TAX RETURNS IN CERTAIN SITUATIONS

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3
Q

ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) ACCOUNT

A

A TAX-ADVANTAGED SAVINGS ACCOUNT ESTABLISHED TO ASSIST PERSONS WITH DISABILITIES

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4
Q

ACTIVE LISTENING

A

REQUIRES THE LISTENERS UNDIVIDED ATTENTION. ACTIVE LISTENING INVOLVES COCENTRATION ON WHAT THE SPEAKER IS SAYING. THE LISTENER MUST PUT ASIDE IRRELEVANT THOUGHTS

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5
Q

ADJUSTED GROSS INCOME

A

GROSS INCOME LESS ABOVE-THE-LINE DEDUCTIONS

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6
Q

AFFECT HEURISTIC

A

DEALS WITH JUDGING SOMETHING, WHETHER IT IS GOOD OR BAD

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7
Q

AGGREGATE DEMAND CURVE

A

A GRAPHICAL REPRESENTATION OF THE QUANTITY OF GOODS AND SERVICES CONSUMERS ARE WILLING TO BUY AT ANY GIVEN PRICE LEVEL

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8
Q

AGGREGATE SUPPLY CURVE

A

A GRAPHICAL REPRESENTATION BETWEEN QUANTITY SUPPLIED AND PRICE

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9
Q

AGGRESSIVE GROWTH FUNDS

A

TYPICALLY INVEST IN SMALL CAP SOCKS, WHERE PRICE APPRECIATION IS THE PRIMARY OBJECTIVE

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10
Q

ALPHA

A

THE DIFFERENCE BETWEEN THE ACTUAL RETURN GENERATED BY THE FUND RELATIVE TO THE EXPECTED RETURN GIVE THE LEVEL OF RISKINESS OF THE FUND, AS MEASURED BY BETA.

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11
Q

ALWAYS BAR LIST

A

CFP BOARDS LIST OF UNACCEPTABLE CONDUCT THAT WILL ALWAYS BAR AN INDIVIDUAL FROM BECOMING CERTIFIED

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12
Q

AMERICAN OPPORTUNITY TAX CREDIT (AOTC)

A

THE AOTC PROVIDES A TAX CREDIT OF UP TO $2,500 (2021) PER STUDENT FOR THE FIRST FOUR YEARS OF QUALIFIED EDUCATION EXPENSES FOR POSTSECONDARY EDUCATION

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13
Q

AMORTIZATION SCHEDULE

A

ILLUSTRATES THE REPAYMENT OF DEBT OVER TIME. EACH DEBT PAYMENT CONSUISTS OF BOTH INTEREST EXPENSE AND PRINCIPAL REPAYMENT

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14
Q

ANCHORING

A

ATTACHING OR ANCHORING ONES THOUGHTS TO A REFERENCE POINT EVEN THOUGH THERE MAY BE NO LOGICAL
RELEVANCE OR IS NOT PERTINENT TO THE ISSUE IN QUESTION. ANCHORING IS ALSO KNOWN AS CONSERVATISM OR BELIEF PERSERVERANCE

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15
Q

ANCILLARY PROBATE

A

CONCURRENT SECOND PROBATE PROCESS CONDUCED IN A NON-DOMICILIARY STATE IN WHICH THE DECENDENT OWNS PROPERTY

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16
Q

ANNUAL EXCLUSION

A

AN EXCLUSION FROM GIFT TAXES FOR PRESENT INTEREST TRANSFERS LESS THAN OR EQUAL TO $15,000 (IN 2021) PER YEAR PER DONEE

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17
Q

ANNUITY

A

A RECURRING CASH FLOW, OF AN EQUAL AMOUNT THAT OCCURS AT PERIODIC (BUT REGULAR) INTERVALS

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18
Q

ANNUITY DUE

A

OCCURS WHEN THE TIMING OF THE FIRST PAYMENT IS AT THE BEGINNING OF THE FIRST PERIOD. THE PERIOD MAY BE THE BEGINNING OF A MONTH, QUARTER, OR YEAR

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19
Q

ANNUITY DUE PAYMENT FROM A LUMP-SUM DEPOSIT

A

THE PAYMENT THAT CAN BE GENERATED AT THE BEGINNING OF EACH PERIOD, BASED ON A LUMP-SUM AMOUNT DEPOSITED TODAY

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20
Q

ANNUITY METHOD

A

DETERMINES HOW MUCH A CLIENT NEEDS TO FUND THEIR RETIREMENT BASED ON THE ASSUMPTIONTHAT THE PERSON WILL DIE EXACTLY AT THE ASSUMED LIFE EXPECTANCY WITH A RETIREMENT ACCOUNT BALANCE OF ZERO

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21
Q

ANONYMOUS CASE HISTORIES

A

SUMMARY OF THE RELEVANT EVENTS IN CERTAIN CASES OF MISCONDUCT, ACCOMPANIED BY AN EXPLANATION OF ANY DISCIPLINE PENALTY, ACTION BY CFP BOARD, AND OTHER INFORMATION

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22
Q

ARITHMETIC OR AVERAGE RETURN

A

THE SUM OF ALL RETURNS DIVIDED BY THE NUMBER OF PERIODS

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23
Q

ARTICLES OF INCORPORATION

A

THE CHARTER DOCUMENT FOR A CORPORATION THAT MUST BE FILED WITH THE SECRETARY OF STATE IN THE STATE OF ORGANIZATION

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24
Q

ARTICLES OF ORGANIZATION

A

THE CHARTER DOCUMENT OF AN LLC THAT MUST BE FILED WITH THE SECRETARY OF STATE IN THE STATE OF ORGANIZATION

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25
Q

ASSET ACCUMULATION PHASE

A

THIS PHASE IS USUALLY FROM THE EARLY 20s TO MID 50s WHEN ADDITIONAL CASH FLOW FOR INVESTING IS LOW AND THE DEBT-TO-NET WORTH RATIO IS HIGH

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26
Q

ASSET ALLOCATION

A

THE DIVIDING OF A PORTFOLIO INTO VARIOUS ASSET CLASSES

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27
Q

ASSETS

A

A BALANCE SHEET CATEGORY THAT REPRESENTS ANYTHING OF ECONOMIC VALUE THAT CAN ULTIMATELY BE CONVERTED TO CASH

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28
Q

ATTORNEY-IN-FACT

A

AGENT OR POWER HOLDER OF A POWER OF ATTORNEY

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29
Q

AVAILABILITY HEURISTIC

A

WHEN A DECISION MAKER RELIES UPON KNOWLEDGE THAT IS READILY AVAILABLE IN HIS OR HER MEMORY, THE COGNITIVE HEURISTIC KNOWN AS “AVAILABILITY” IS INVOKED

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30
Q

BALANCE SHEET

A

A STATEMENT OF FINANCIAL POSITION THAT REPRESENTS THE ACCOUNTING FOR ITEMS THE CLIENT “OWNS” (ASSETS) AND ITEMS THAT ARE “OWED” (LIABILITIES). THE BALANCE SHEET PROVIDES A SNAPSHOT OF THE CLIENTS ASSETS, LIABILITIES, AND NET WORTH AS OF A STATED DATE

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31
Q

BALANCED FUNDS

A

TYPICALLY INVEST IN BOTH FIXED INCOME SECUIRTIES AND EQUITY SECURITIES

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32
Q

BAPCPA OF 2005

A

AMENDS THE TRUTH IN LENDING ACT IN VARIOUS RESPECTS, INCLUDING REQUIRING CERTAIN CREDITORS TO DISCLOSE ON THE FRONT OF BILLING STATEMENTS A MINIMUM MONTHLY PAYMENT WARNING FOR CONSUMERS

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33
Q

BASIS

A

REPRESENTS THE TOTAL CAPITAL OR AFTER-TAX INCOME USED BY A TAXPAYER TO PURCHASE AN INVESTMENT

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34
Q

BEHAVIORAL FINANCE

A

CONTAINS MUCH OF THE SCIENTIFIC FRAMEWORK AND LESSONS LEARNED FROM TRADITIONAL FINANCE, AMENDS SOME OF IT WITH BASIC ASSUMPTIONS BASED ON NORMAL, MORE HUMAN-LIKE BEHAVIOR, AND SUPPLEMENTS OTHER ASPECTS OF IT WITH NOTIONS FROM PSYCHOLOGY AND SOCIOLOGY

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35
Q

BELOW-THE-LINE DEDUCTIONS

A

DEDUCTIONS FROM ADJUSTED GROSS INCOME, INCLUDING ITEMIZED OR STANDARD DEDUCTIONS, AND THE QUALIFIED BUSINESS INCOME DEDUCTION

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36
Q

BENEFICIARY

A

THE PERSON(S) ENTITLED TO RECIEVE THE DEATH BENEFIT OF A LIFE INSURANCE POLICY AT THE INSUREDS DEATH. ALSO, THE PERSON(S) WHO HOLD THE BENEFICIAL TITLE TO A TRUSTS ASSETS

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37
Q

BETA

A

A MEASURE OF SYSTEMATIC RISK AND PROVIDES THE CORRELATION OF THE VOLATILITY OF A PORTFOLIO AS COMPARED TO THE MARKET BENCHMARK

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38
Q

BONDS

A

A DEBT ISSUANCE WHERE THE BOND ISSUER MAKES A PROMISE TO MAKE PERIODIC COUPON PAYMENTS (INTEREST) AND REPAYMENT OF THE PAR VALUE (PRINCIPAL) AT MATURITY

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39
Q

BUSINESS CYCLE

A

MEASURES ECONOMIC ACTIVITY OVER TIME. THE BUSINESS CYCLE IS CHARACTERIZED BY EXPANSION, PEAK, CONTRACTION OR RECESSION, AND TROUGH

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40
Q

BUSINESS RISK

A

THE INHERENT RISK OF DOING BUSINESS IN A PARTICULAR INDUSTRY

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41
Q

CALL RISK

A

THE RISK THAT A BOND WILL BE RETIRED EARLY BY THE ISSUING COMPANY

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42
Q

CALLS

A

GIVES THE HOLDER THE RIGHT TO BUY THE UNDERLYING SECURITY AT A CERTAIN PRICE BY A CERTAIN DATE

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43
Q

CANDIDATE FOR CFP(r) CERTIFICATION

A

INDIVIDUALS WHO HAVE COMPLETED A CFP BOARD REGISTERED EDUCATION PROGRAM MAY PRESENT THEMSELVES AS A “CANDIDATE FOR CFP(R) CERTIFICATION” FOR A PERIOD OF UP TO FIVE YEARS FOLLOWING COMPLETION OF THE EDUCATION PROGRAM WHILE FILFILLING THE REMAINING EXAM AND EXPERIENCE REQUIREMENTS

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44
Q

CAPITAL ASSET PRICING MODEL (CAPM)

A

INFORMS INVESTORS ABOUT A REASONABLE REQUIRED RETURN FOR SHAREHOLDERS WHEN INVESTING IN INDIVIDUAL STOCKS, BUT THE MODEL IS EASILY APPLIED TO MUTUAL FUNDS. THE REQUIRED RETURN IS BASED ON RISK-FREE RATES OF INTEREST, EXPECTED MARKET RETURNS, AND THE LEVEL OF SYSTEMATIC RISK OF THE FUND OR PORTFOLIO

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45
Q

CAPITALIZATION OF EARNINGS MODEL

A

A CAPITAL NEEDS ANALYSIS METHOD BASED ON PRODUCING A PERPETUAL STREAM OF INCOME

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46
Q

CAPITAL MARKET LINE (CML)

A

THE MACRO ASPECT OF THE CAPITAL ASSET PRICING MODEL (CAPM). IT SPECIFIES THE RELATIONSHIP BETWEEN RISK AND RETURN IN ALL POSSIBLE PORTFOLIOS

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47
Q

CAPITAL PRESERVATION MODEL (CP)

A

A CAPITAL NEEDS ANALYSIS METHOD THAT ASSUMES THAT AT THE CLIENTS LIFE EXPECTANCY, THE CLIENT HAS EXACTLY THE SAME ACCOUNT BALANCE AS HE DID AT THE BEGINNING OF RETIREMENT

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48
Q

CAPITALIZATION OF EARNINGS METHOD

A

A METHOD THAT PRESERVES THE CAPITAL AND INITIALLY USES A NUMERATOR OF GROSS INCOME AND DENOMINATOR OF RISKLESS RATE OF RETURN TO DETERMINE LIFE INSURANCE NEEDS. IT CAN BE FURTHER ADJUSTED TO ACCOUNT FOR TAXES, PERSONAL CONSUMPTION, AND INFLATION

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49
Q

CARD ACT OF 2009

A

PREVENTS CREDIT CARD COMPANIES (AND BANKS) FROM CHARGING HIDDEN FEES AND EXTRAORDINARY INTEREST RATES AS WELL AS PROMOTING EASY TO UNDERSTAND STATEMENTS

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50
Q

CASH AND CASH EQUIVALENTS

A

A BALANCE SHEET CATEGORY THAT REPRESENTS ASSETS THAT ARE HIGHLY LIQUID, WHICH MEANS THEY ARE EITHER CASH OR CAN BE CONVERTED TO CASH (WITHIN THE NEXT 12 MONTHS) WITH LITTLE TO NO PRICE CONCESSION FROM THE PRINCIPAL AMOUNT INVESTED

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51
Q

CASH FLOW APPROACH

A

THIS APPROACH TAKES AN INCOME STATEMENT APPROACH TO RECOMMENDATIONS. IT USES THE THREE-PANEL APPROACH AND USES A PRO FORMA APPROACH (AS IF) “TO PURCHASE” THE RECOMMENDATIONS THUS DRIVING DOWN THE DISCRETIONARY CASH FLOW. NEXT, POSITIVE CASH FLOWS OR THE SALE OF ASSETS ARE IDENTIFIED TO FINANCE THE RECOMMENDATIONS WHICH WERE PURCHASED

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52
Q

CASH FLOW STATEMENT

A

EXPLAINS HOW CASH AND CASH EQUIVALENTS WERE USED OR GENERATED BETWEEN TWO BALANCE SHEETS

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53
Q

CEILING

A

A MAXIMUM LIMIT ON THE AMOUNT THAT MAY BE DEDUCTIBLE. EXPENSES ARE ONLY DEDUCTIBLE UP TO THE CEILING AMOUNT

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54
Q

CERTIFICANT

A

AN INDIVIDUAL WHO IS CURRENTLY CERTIFIED BY THE CFP BOARD

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55
Q

CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC. (“CFP BOARD”)

A

BOARD THAT MAINTAINS PROFESSIONAL STANDARDS NECESSARY FOR COMPETENCY AND ETHICS IN THE FINANCIAL PLANNING PROFESSION FOR THOSE PROFESSIONALS WHO HAVE BEEN GRANTED THE RIGHT TO USE THEIR DESIGNATION

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56
Q

CFP BOARD COUNSEL

A

HAS THE AUTHORITY TO INVESTIGATE AND FILE A COMPLAINT AGAINST A RESPONDENT FOR ALLEGED VIOLATIONS OF THE CODE AND STANDARDS OR THE PATHWAY TO CFP CERTIFICATION AGREEMENT. THE TERM INCLUDES CFP BOARD STAFF OPERATING AT THE DIRECTION OF CFP BOARD COUNSEL

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57
Q

CHAPTER 11 BANKRUPTCY

A

KNOWN AS “REORGANIZATION BANKRUPTCY” FOR CORPORATIONS, SOLE PROPRIETORSHIPS, AND PARTNERSHIPS

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58
Q

CHAPTER 13 BANKRUPTCY

A

ALSO KNOWN AS A “WAGE EARNERS PLAN,” IS FOR INDIVIDUALS OR SELF-EMPLOYED WORKERS THAT WANT TO KEEP THEIR ASSETS AND PAYOFF A PORTION OF THEIR DEBTS OVER TIME

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59
Q

CHAPTER 7 BANKRUPTCY

A

FOR INDIVIDUALS OR BUSINESSES TO USE FOR PROTECTION FROM CREDITORS UNDER FEDERAL AND STATE BANKRUPTCY LAWS

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60
Q

CHECKING THE BOX

A

WHEN AN ELIGIBLE ENTITY CHOOSES TO BE TAXED AS EITHER A CORPORATION OR A PARTNERSHIP

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61
Q

CLIENT

A

ANY PERSON, INCLUDING A NATURAL PERSON, BUSINESS ORGANIZATION, OR LEGAL ENTITY, TO WHOM THE CFP PROFESSIONAL PROVIDES OR AGREES TO PROVIDE PROFESSIONAL SERVICES PURSUANT TO AN ENGAGEMENT

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62
Q

CLOSED QUESTIONS

A

SEEKS A RESPONSE THAT IS VERY SPECIFIC AND COMMONLY INVOLVES AN ANSWER THAT CAN BE ACCOMPLISHED WITH A SINGLE WORD OR TWO. CLOSED QUESTIONS LEAD WITH IS, ARE, DO, DID, COULD, WOULD, HAVE, OR “IS IT NOT TRUE THAT…”

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63
Q

CLOSED-END INVESTMENT COMPANIES

A

A TYPE OF INVESTMENT COMPANY THAT TRADES ON STOCK MARKET EXCHANGES. CLOSED-END FUNDS DO NOT GENERALLY ISSUE ADDITIONAL SHARES AFTER THEIR INITIAL OFFERING

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64
Q

CODE OF ETHICS

A

ORGANIZED INTO SIX OVERRIDING PRINCIPLES THAT PROVIDE A FRAMEWORK FOR THE ETHICAL AND PROFESSIONAL STANDARDS AND IDEALS FOR CFP(R) PROFESSIONALS

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65
Q

COEFFICIENT OF DETERMINATION (R-SQUARED)

A

A MEASURE OF HOW MUCH RETURN IS A RESULT OF THE CORRELATION TO THE MARKET OR WHAT PERCENTAGE OF A SECURITYS RETURN IS A RESULT OF THE MARKET

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66
Q

COGNITIVE-BEHAVIORAL PARADIGM (COGNITIVE-BEHAVIOR SCHOOL OF THOUGHT)

A

HUMANS ARE BEINGS ARE SUBJECT TO THE SAME LEARNING PRINCIPLES THAT WERE ESTABLISHED IN ANIMAL RESEARCH. THE BASIC PRINCIPLES OF CLASSICAL AND OPERANT CONDITIONING ARE ASSUMED TO ACCOUNT FOR AN INDIVIDUALS BEHAVIOR AND UNDERSTANDINGS THROUGHOUT THEIR LIVES

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67
Q

COLLEGE SAVINGS PLANS (529 SAVINGS PLANS)

A

A PLAN THAT ALLOWS FOR COLLEGE SAVING ON A TAX-DEFERRED BASIS WITH ATTENDANCE AT ANY ELIGIBLE EDUCATION INSTITUTION. DISTRIBUTIONS FROM A COLLEGE SAVINGS PLAN ARE FEDERAL AND STATE INCOME TAX-FREE, AS LONG AS THEY ARE USED TO PAY FOR QUALIFIED EDUCATION EXPENSES

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68
Q

COMMISSION

A

COMPENSATION GENERATED FROM A TRANSACTION INVOLVING A PRODUCT OR SERVICE AND RECEIVED BY AN AGENT OR BROKER, USUALLY CALCULATED AS A PERCENTAGE ON THE AMOUNT OF THE TRANSACTION. THIS INCLUDES 12b-1 FEES, TRAILINGCOMMISSIONS, SURRENDER CHARGES AND CONTINGENT DEFERRED SALES CHARGES

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69
Q

COMMISSION AND FEE

A

IF A CFP PROFESSIONAL OR ANY RELATED PARTY RECEIVES BOTH FEES AND SALES-RELATED COMPENSATION FOR PROVIDING PROFESSIONAL ACTIVITIES, THE CFP PROFESSIONALS COMPENSATION IS DESCRIBED AS “COMMISSION AND FEE”

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70
Q

COMMUNITY PROPERTY

A

A CIVIL LAW ORIGINATING STATUTORY REGIME UNDER WHICH MARRIED INDIVIDUALS OWN AN EQUAL UNDIVIDED INTEREST IN ALL PROPERTY ACCUMULATED DURING THEIR MARRIAGE. PROPERTY ACQUIRED BEFORE THE MARRIAGE AND PROPERTY RECEIVED BY GIFT OR INHERITANCE DURING THE MARRIAGE RETAINS ITS STATUS AS SEPERATE PROPERTY

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71
Q

COMPETENCE

A

REQUIRES ATTAINING AND MAINTAINING AN ADEQUATE LEVEL OF KNOWLEDGE AND SKILL, AND APPLICATION OF THAT KNOWLEDGE AND SKILL IN PROVIDING SERVICES TO CLIENTS

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72
Q

COMPLEMENTS

A

PRODUCTS THAT ARE CONSUMED JOINTLY

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73
Q

COMPOSURE

A

A CLIENTS ABILITY TO REMAIN CALM AND FOCUSED WHEN UNDER PRESSURE

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74
Q

CONFIDENTIALITY

A

ENSURING THAT INFORMATION IS ACCESSIBLE ONLY TO THOSE AUTHORIZED TO HAVE ACCESS

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75
Q

CONFIRMATION BIAS

A

A COMMONLY USED AND POPULAR PHRASE IS THAT “YOU DO NOT GET A SECOND CHANCE AT A FIRST IMPRESSION.” PEOPLE TEND TO FILTER INFORMATION AND FOCUS ON INFORMATION SUPPORTING THEIR OPINIONS

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76
Q

CONFLICT OF INTEREST

A

(A) WHEN A CFP PROFESSIONALS INTERESTS (INCLUDING THE INTERESTS OF THE CFP PROFESSIONALS FIRM) ARE ADVERSE TO THE CFP PROFESSIONALS DUTIES TO A CLIENT, OR (B) WHEN A CFP PROFESSIONAL HAS DUTIES TO ONE CLIENT THAT ARE ADVERSE TO ANOTHER CLIENT

77
Q

CONSERVATION (RISK MANAGEMENT) PHASE

A

THIS PHASE IS FROM LATE 20s TO EARLY 70s, WHERE CASH FLOW, ASSETS, AND NET WORTH HAVE INCREASED AND DEBT HAS DECREASED SOMEWHAT. IN ADDITION, RISK MANAGEMENT OF EVENTS LIKE UNEMPLOYMENT, DISABILITY DUE TO ILLNESS OR ACCIDENT, AND UNTIMELY DEATH BECOME A PRIORITY

78
Q

CONSTANT GROWTH DIVIDEND DISCOUNT MODEL

A

VALUES A COMPANYS STOCK BY DISCOUNTING THE FUTURE STREAM OF CASH FLOWS OR DIVIDENDS

79
Q

CONSUMER PRICE INDEX (CPI)

A

MEASURES THE OVERALL PRICE LEVELS FOR A BASKET OF GOODS AND SERVICES CONSUMERS PURCHASE

80
Q

COST BASIS

A

INITIAL BASIS AN INVESTOR ACQUIRES IN AN ASSET BY USING CAPITAL TO PURCHASE THE INVESTMENT

81
Q

COUNTRY RISK

A

THE RISK OF POLITICAL AND ECONOMIC STABILITY OR INSTABILITY OF A COUNTRY THAT A COMPANY FACES WHEN DOING BUSINESS IN A PARTICULAR COUNTRY

82
Q

COVARIANCE

A

THE MEASURE OF TWO SECURITIES WHEN COMBINED AND THEIR INTERACTIVE RISK (RELATIVE RISK)

83
Q

COVERDELL EDUCATION SAVINGS ACCOUNT (ESA)

A

A TAX DEFERRED TRUST OR CUSTODIAL ACCOUNT ESTABLISHED TO PAY FOR QUALIFIED HIGHER EDUCATION OR QUALIFIED ELEMENTARY / SECONDARY SCHOOL EXPENSES

84
Q

CURRENT RATIO

A

MEASURES HOW MANY TIMES THE CLIENT CAN SATISFY THEIR SHORT-TERM LIABILITIES WITH CURRENT ASSETS (CASH AND CASH EQUIVALENTS)

85
Q

CYCLICAL UNEMPLOYMENT

A

OCCURS WHEN THERE IS AN OVERALL DOWNTURN IN BUSINESS ACTIVITY AND FEWER GOODS ARE BEING PRODUCED CAUSING A DECREASE IN THE DEMAND FOR LABOR

86
Q

DEBT

A

THE LENDING OF FUNDS IN RETURN FOR PERIODIC INTEREST PAYMENTS AND THE REPAYMENT OF THE PRINCIPAL DEBT OBLIGATION

87
Q

DEBT MANAGEMENT

A

THE ANALYSIS OF DEBT BECAUSE CLIENTS CAN HAVE TOO MUCH DEBT, DEBT THAT HAS HIGH INTEREST RATES, AND DEBT THAT IS GENERALLY NOT WELL MANAGED. THE ANALYSIS OF DEBT INCLUDES CALCULATING HOUSING RATIOS 1 AND 2 AND COMPARING THOSE TO WELL ESTABLISHED BENCHMARKS (METRICS) OF 28%/36%. IN ADDITION, THE FINANCIAL PLANNER WILL EVALUATE THE QUALITY AND THE COST OF EACH CLIENTS INDIVIDUAL DEBT

88
Q

DEBT RATIOS

A

MEASURE HOW WELL THE CLIENT IS MANAGING THEIR OVERALL DEBT STRUCTURE

89
Q

DEBT-TO-TOTAL ASSETS RATIO

A

INDICATES WHAT PERCENTAGE OF ASSETS IS BEING PROVIDED BY CREDITORS. THE LOWER THIS RATIO THE BETTER, AS IT INDICATES THAT THE ASSETS OWNED HAVE A LOW AMOUNT OF DEBT OWED

90
Q

DEDUCTIONS

A

ITEMS THAT ARE SUBTRACTED FROM GROSS INCOME, EITHER BELOW-OR ABOVE-THE -LINE, IN ORDER TO ARRIVE AT TAXABLE INCOME

91
Q

DEFAULT (UNDER CFPBOARDS PROCEDURAL RULES)

A

A RESPONDENT IS IN DEFAULT IF HE OR SHE FAILS TO ACKNOWLEDGE RECEIPT OF A NOTICE OF INVESTIGATION WITHIN THE REQUIRED TIME LIMIT, FAILS TO FILE AN ANSWER TO A COMPLAINT WITHIN THE REQUIRED TIME LIMIT, FAILS TO PROVIDE PROOF OF COMPLIANCE WITH AN INTERIM SUSPENSION ORDER WITHIN THE REQUIRED TIME LIMIT, OR FAILS TO PAY THE HEARING FEES ASSESSED BY CFP BOARD. A DEFAULT MAY RESULT IN AN ADMINISTRATIVE ORDER OF SUSPENSION OR REVOCATION (OR AN ADMINISTRATIVE TEMPORARY OR PERMANENT BAR FOR CANDIDATES FOR CFP CERTIFICATION)

92
Q

DEFAULT RISK

A

THE RISK THAT A COMPANY MAY NOT BE ABLE TO MAKE INTEREST OR PRINCIPAL PAYMENTS UNDER A DEBT OBLIGATION

93
Q

DEFENSE OF MARRIAGE ACT (DOMA)

A

SIGNED INTO LAW ON SEPTEMBER 21, 1996 AND WAS “TO DEFINE AND PROTECT THE INSTITUTION OF MARRIAGE”. UNDER SECTION 7, DEFINITION OF “MARRIAGE” AND “SPOUSE” THE LAW STATES, “IN DETERMINGING THE MEANING OF ANY ACT OF CONGRESS, OR OF ANY RULING, REGULATION, OR INTERPRETATION OF THE VARIOUS ADMINISTRATIVE BUREAUS AND AGENCIES OF THE UNITED STATES, THE WORD “MARRIAGE” MEANS ONLY A LEGAL UNION BETWEEN ONE MAN AND ONE WOMAN AS HUSBAND AND WIFE, AND THE WORD “SPOUSE” REFERS ONLY TO A PERSON OF THE OPPOSITE SEX WHO IS A HUSBAND OR WIFE”. HOWEVER, IN THE 2013 LANDMARK CASE, UNITED STATES v. WINDSOR, THE SUPREME COURT EFFECTIVELY DECLARED DOMA AS UNCONSTITUTIONAL. THE RESULT OF THIS RULING IS THAT THERE IS NO LONGER A DISTINCTION FOR FEDERAL PURPOSES BETWEEN MARRIAGES OF HETEROSEXUALS AND MARRIAGES OF HOMOSEXUALS

94
Q

DEFLATION

A

A DECREASE IN THE OVERALL PRICE LEVELS OF GOODS AND SERVICES

95
Q

DEMAND

A

REPRESENTS THE QUANTITY CONSUMERS ARE WILLING TO PURCHASE OF A GOOD OR SERVICE, AT A PARTICULAR PRICE

96
Q

DEPENDENT

A

A PERSON WHO IS A QUALIFYING CHILD OR QUALIFYING RELATIVE OF THE TAXPAYER

97
Q

DEPENDENT WITH SPECIAL NEEDS

A

COULD BE AN INFANT, ADOLESCENT, OR ADULT. THE DEPENDENT COULD HAVE A WIDE RANGE OF CHALLENGES FROM VERY MILD PHYSICAL, EMOTIONAL, OR PSYCHOLOGICAL, TO A SITUATION WHERE AROUND THE CLOCK CARE IS REQUIRED

98
Q

DERIVATIVES

A

FINANCIAKL SECURITIES THAT DERIVE THEIR VALUE FROM SOME UNDERLYING ASSET

99
Q

DEVELOPMENTAL PARADIGM (“DEVELOPMENTAL” SCHOOL OF THOUGHT)

A

BELIEVES THAT HUMAN DEVELOPMENT OCCURS IN STAGES OVER TIME. RELATIONSHIPS THAT ARE FORMED EARLY IN LIFE BECOME A TEMPLATE FOR ESTABLISHING RELATIONSHIPS IN ADULTHOOD. AS TO EMOTIONS, THE DEVELOPMENTAL PARADIGM ASSUMES THAT ALL HUMANS DEVELOP AND PROGRESS IN A PREDICTABLE SEQUENCE

100
Q

DILIGENCE

A

REQUIRES THE PROVISION OF SERVICES IN A RESONABLY PROMPT AND THOROUGH MANNER, INCLUDING THE PROPER PLANNING FOR, AND SUPERVISION OF, THE RENDERING OF PROFESSIONAL SERVICES

101
Q

DISABILITY INSURANCE

A

INSURANCE THAT PROVIDES REPLACEMENT INCOME TO THE INSURED WHILE THE INSURED IS UNABLE TO WORK BECAUSE OF SICKNESS (ILLNESS) OR INJURY (ACCIDENT)

102
Q

DISCIPLINARY AND ETHICS COMMISSION (DEC)

A

COMPOSED OF CFP PROFESSIONALS AND MEMBERS OF THE PUBLIC; HAS THE AUTHORITY TO ISSUE A FINAL ORDER IMPOSING DISCIPLINE IN THE FORM OF A SANCTION

103
Q

DISCIPLINARY RULES

A

PRIOR TO JUNE 2020, THE DISCIPLINARY RULES PROVIDED DETAILED PROCEDURES FOLLOWED BY CFP BOARD IN ENFORCING THE STANDARDS OF PROFESSIONAL CONDUCT. REPLACED BY THE PROCEDURAL RULES IN JUNE 2020

104
Q

DISCOUNT RATE

A

THE INTEREST RATE THAT THE FEDERAL RESERVE CHARGES FINANCIAL INSTITUTIONS FOR SHORT-TERM LOANS

105
Q

DISCRETIONARY CASH FLOWS

A

EXPENSES WHICH CAN BE AVOIDED IN THE EVENT OF LOSS OF INCOME

106
Q

DISINFLATION

A

A SLOWDOWN IN THE RATE OF INFLATION OR A SLOWDOWN IN THE GENERAL PRICE INCREASE OF GOODS AND SERVICES

107
Q

DISPOSITION EFFECT

A

THE COGNITIVE BIAS IS “FAULTY FRAMING” WHERE NORMAL INVESTORS DO NOT MARK THEIR STOCKS TO MARKET PRICES. INVESTORS CREATE MENTAL ACCOUNTS WHEN THEY PURCHASE STOCKS AND CONTINUE TO MARK THEIR VALUE TO PURCHASE PRICES EVEN AFTER MARKET PRICES HAVE CHANGED. THE NORMAL INVESTOR DOES NOT CONSIDER THE STOCK A LOSER UNTIL THE STOCK IS SOLD

108
Q

DISTRIBUTION (GIFTING) PHASE

A

THIS PHASE IS FROM THE LATE 40s TO END OF LIFE AND OCCURS WHEN THE INDIVIDUAL HAS HIGH ADDITIONAL CASH FLOW, LOW DEBT, AND HIGH NET WORTH

109
Q

DO NOT RESUSCITATE (DNR)

A

DOCUMENTS DECLARE THE PRINCIPALS WISH TO AVOID HAVING CARDIOPULMONARY RESUSCITATION (CPR) PERFORMED IN THE EVENT THEIR HEART STOPS BEATING

110
Q

DOCTRINE OF CONSTRUCTIVE RECEIPT

A

A CASH METHOD TAXPAYER MUST REPORT INCOME WHEN IT IS CREDITED TO THE TAXPAYERS ACCOUNT OR WHEN IT IS MADE AVAILABLE WITHOUT RESTRICTION

111
Q

DOCTRINE OF THE FRUIT AND THE TREE

A

INCOME EARNED BY ONE TAXPAYER CANNOT BE ASSIGNED TO ANOTHER TAXPAYER. IT IS DESIGNED TO PREVENT TAXPAYERS FROM ASSIGNING INCOME TO A FAMILY MEMEBER IN A LOWER INCOME TAX BRACKET WHILE RETAINING THE ASSET THAT PRODUCES THE INCOME

112
Q

DONEE

A

THE PERSON WHO RECEIVES THE GIFT

113
Q

DONOR

A

THE PERSON WHO GIVES THE GIFT

114
Q

DUE CARE

A

ENGAGING IN CONDUCT THAT A REASONABLE AND PRUDENT INDIVIDUAL WOULD EXERCISE UNDER THE SAME OR SIMILAR CIRCUMSTANCES

115
Q

DURABLE POWER OF ATTORNEY FOR HEALTH CARE

A

A WRITTEN DOCUMENT ENABLING ONE INDIVIDUAL, THE PRINCIPAL, TO DESIGNATE ANOTHER PERSON TO ACT AS HIS “ATTORNEY-IN-FACT.” A DURABLE POWER OF ATTORNEY SURVIVES THE INCAPACITY AND/OR DISABILITY OF THE PRINCIPAL

116
Q

ECONOMIC BENEFIT DOCTRINE

A

STATES THAT IF A TAXPAYER RECEIVES AN ECONOMIC BENEFIT AS INCOME, THE VALUE OF THAT BENEFIT WILL BE SUBJECT TO TAX

117
Q

ECONOMIC INDICATORS

A

DESCRIBES THE CURRENT AND FUTURE ECONOMY AND BUSINESS CYCLE. THE THREE ECONOMIC INDICATORS ARE: INDEX OF LEADING ECONOMIC INDICATORS, INDEX OF LAGGING ECONOMIC INDICATORS, AND INDEX OF COINCIDENT ECONOMIC INDICATORS

118
Q

EDUCATION FUNDING NEEDS ANALYSIS

A

DETERMINATION OF THE LUMP SUM OR ANNUAL SAVINGS REQUIRED TO PAY FOR COLLEGE

119
Q

EFFECTIVE ANNUAL RATE

A

AN INVESTMENTS ANNUAL RATE OF RETURN WHEN COMPOUNDING OCCURS MORE THAN ONCE PER YEAR

120
Q

EFFECTIVE TRANSFER

A

A TRANSFER OF A PERSONS ASSETS TO THE PERSON OR CHARITABLE INSTITUTION INTENDED BY THAT PERSON

121
Q

EFFICIENT FRONTIER

A

COMPARES VARIOUS PORTFOLIOS BASED ON THEIR RISK-RETURN RELATIONSHIP. AN EFFICIENT PORTFOLIO PROVIDES THE HIGHEST AMOUNT OF RETURN FOR ANY GIVEN LEVEL OF RISK

122
Q

EFFICIENT TRANSFER

A

A TRANSFER IN WHICH COSTS OF THE TRANSFER ARE MINIMIZED CONSISTENT WITH THE GREATEST ASSURANCE OF EFFECTIVENESS

123
Q

EMERGENCY FUND RATIO

A

MEASURES HOW MANY MONTHS OF NON-DISCRETIONARY EXPENSES THE CLIENT HAS IN THE FORM OF CASH AND CASH EQUIVALENTS OR CURRENT ASSETS

124
Q

EMPLOYER-PROVIDED EDUCATION ASSISTANCE PROGRAM

A

A PROGRAM ESTABLISHED BY AN EMPLOYER TO REIMBURSE EMPLOYEES FOR EDUCATION EXPENSES. THE EDUCATION EXPENSES MAY OR MAY NOT BE DIRECTLY RELATED TO THE EMPLOYEES CURRENT JOB DUTIES; IT DEPENDS ON THE EMPLOYERS POLICY

125
Q

ENGAGEMENT

A

AN ORAL OR WRITTEN AGREEMENT ARRANGEMENT, OR UNDERSTANDING

126
Q

ENGAGEMENT LETTER

A

A LEGAL AGREEMENT BETWEEN A PROFESSIONAL ORGANIZATION AND A CLIENT THAT DEFINES THEIR BUSINESS RELATIONSHIP

127
Q

EQUAL CREDIT OPPORTUNITY ACT

A

PROHIBITS DISCRIMINATION, WHEN EVALUATING A DECISION TO GRANT CONSUMER CREDIT

128
Q

EQUALIBRIUM PRICE

A

REPRESENTS THE PRICE AT WHICH THE QUANTITY DEMANDED EQUALS THE QUANTITY SUPPLIED

129
Q

EQUITY

A

REPRESENTS OWNERSHIP IN A BUSINESS OR PROPERTY

130
Q

EQUITY MUTUAL FUNDS

A

TYPICALLY INVEST IN EQUITY SECURITIES

131
Q

ERISA (EMPLOYEE RETIREMENT INCOME SECURITY ACT)

A

DESIGNED TO PROTECT EMPLOYEE RETIREMENT SAVINGS ACCOUNTS FROM CREDITORS AND FROM PLAN SPONSORS

132
Q

ESTATE PLANNING

A

THE PROCESS OF ACCUMULATION, MANAGEMENT, CONSERVATION, AND TRANSFER OF WEALTH CONSIDERING LEGAL, TAX, AND PERSONAL OBJECTIVES

133
Q

ESTATE TAX

A

IMPOSED ON THE DECENDENTS RIGHT TO TRANSFER PROPERTY TO HIS HEIRS WHEN A CITIZEN OR RESIDENT OF THE UNITED STATES DIES

134
Q

EXCESS RESERVES

A

REPRESENTS THE AMOUNT OF CASH OR DEPOSITS WITH THE FEDERAL RESERVE IN EXCESS OF THE MINIMUM AMOUNT REQUIRED

135
Q

EXCHANGE RATE RISK

A

THE RISK THAT INTERNATIONAL INVESTMENTS AND DOMESTIC COMPANIES THAT IMPORT OR EXPORT GOODS ARE SUBJECT TO CHANGES IN RELATIONSHIP TO THE PRICE OF A DOLLAR, RELATIVE TO FOREIGN CURRENCIES.

136
Q

EXCHANGE TRADED FUNDS (ETFs)

A

A FORM OF AN INVESTMENT COMPANY THAT INVESTS IN SECURITIES THAT ARE INCLUDED IN A PARTICULAR INDEX

137
Q

EXCLUSIONS

A

INCOME ITEMS THAT ARE SPECIFICALLY EXEMPTED FROM INCOME TAX

138
Q

EXECUTIVE RISK

A

THE RISK OF MORAL CHARACTER OF THE EXECUTIVES RUNNING THE COMPANY. THE EXTENT TO WHICH EXECUTIVES BREAK LAWS, REGULATIONS, OR ETHICAL STANDARDS THAT MAY NEGATIVELY IMPACT A COMPANY

139
Q

EXPECTED RETURN

A

THE RATE OF RETURN EXPECTED FOR AN ASSET OR INVESTMENT PORTFOLIO

140
Q

EXPENSES

A

AN INCOME STATEMENT CATEGORY, EXPENSES REPRESENT THOSE ITEMS THAT ARE PAID REGULARLY BY THE CLIENT DURING THE TIME PERIOD BEING PRESENTED. EXAMPLES OF EXPENSES INCLUDE MORTGAGE PRINCIPLE AND INTEREST, UTILITIES, TAXES, INSURANCE, TELEPHONE, WATER, CABLE OR SATELLITE, INTERNET, AND CELL PHONE

141
Q

EXTERNAL DATA

A

THE EXTERNAL DATA, ALSO KNOWN AS THE EXTERNAL ENVIRONMENT INCLUDES THE CURRENT ECONOMIC, LEGAL, POLITICAL, SOCIOLOGICAL, TAX, AND TECHNOLOGY ENVIRONMENTS. EXAMPLES OF EXTERNAL DATA ARE THE CURRENT INTEREST RATES, STATUS OF THE HOUSING, JOB, INSURANCE AND INVESTMENT MARKETS, THE LOCAL COST OF LIVING, AND THE EXPECTED INFLATION RATE

142
Q

EXTRINSIC MOTIVATION

A

AN OUTSIDE REWARD (YOU EXPECT TO GET SOMETHING IN RETURN) OR AVOIDANCE OF PUNISHMENT

143
Q

FAILURE TO FILE PENALTY

A

A FIVE PERCENT PENALTY OF THE UNPAID TAX BALANCE FOR EACH MONTH OR PART THEREOF THAT A TAX RETURN IS LATE

144
Q

FAILURE TO PAY PENALTY

A

A PENALTY OF 0.5 PERCENT PER MONTH OR PART THEREOF THAT A TAXPAYER FAILS TO PAY TAX THAT IS OWED

145
Q

FAIR CREDIT BILLING ACT

A

REQUIRES TIMELY, WRITTEN VERIFICATION TO A CONSUMER DISPUTING A BILLING ERROR

146
Q

FAIR CREDIT REPORTING ACT

A

PROTECTS CONSUMERS INFORMATION COLLECTED BY THE MAJOR CREDIT BUREAUS (EQUIFAX, TRANSUNION, AND EXPERIAN)

147
Q

FAIR DEBT COLLECTION PRACTICES ACT

A

PREVENTS THIRD PARTY DEBT COLLECTORS FROM USING DECEPTIVE OR ABUSIVE METHODS TO COLLECT DEBTS

148
Q

FAIR MARKET VALUE

A

THE PRICE A WILLING BUYER AND WILLING SELLER WOULD AGREE TO WHEN BOTH HAVE REASONABLE KNOWLEDGE OF THE FACTS OF THE TRANSACTION AND NEITHER IS UNDER ANY COMPULSION TO BUY OR SELL

149
Q

FAIR PACKAGING AND LABELING ACT (FPLA)

A

HELPS CONSUMERS COMPARE THE VALUE OF PRODUCTS AND TO PREVENT UNFAIR OR DECEPTIVE PACKAGING AND LABELING OF MANY HOUSEHOLD ITEMS

150
Q

FAMILY LIMITED PARTNERSHIP

A

A SPECIAL TYPE OF LIMITED PARTNERSHIP CREATED UNDER STATE LAW WITH THE PRIMARY PURPOSE OF TRANSFERRING ASSETS TO YOUNGER GENERATIONS USING ANNUAL EXCLUSIONS AND VALUATION DISCOUNTS FOR MINORITY AND LACK OF MARKETABILITY

151
Q

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)

A

FORMED IN 1933, AS A RESULT OF THE BANK FAILURES THAT OCCURED IN THE 1920s AND 1930s. THE THREE GOALS OF THE FDIC ARE TO INSURE DEPOSITS, MANAGE RECEIVERSHIPS, AND SUPERVISE FINANCIAL INSTITUTIONS

152
Q

FEDERAL FUNDS RATE

A

THE BANK TO BANK LENDING RATE

153
Q

FEDERAL PELL GRANT

A

NEED-BASED FINANCIAL AID FOR STUDENTS WHO HAVE NOT EARNED AN UNDERGRADUATE DEGREE OR A PROFESSIONAL DEGREE. A PELL GRANT DOES NOT HAVE TO BE REPAID. PELL GRANTS ARE AWARDED BASED ON FINANCIAL NEED

154
Q

FEDERAL PERKINS LOAN

A

A PROGRAM FOR UNDERGRADUATE AND GRADUATE STUDENTS WITH EXCEPTIONAL FINANCIAL NEED. THE PERKINS LOAN IS A LOW INTERST RATE LOAN (5%), WHICH WAS OFFERED THROUGH A UNIVERSITYS FINANCIAL AID OFFICE. THE UNIVERSITY SERVES AS THE LENDER AND THE FEDERAL GOVERNMENT PROVIDES THE FUNDS. NO NEW PERKINS LOANS ARE AVAILABLE AFTER SEPTEMBER 30,2017

155
Q

FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (FSEOG)

A

A GRANT AWARDED TO STUDENTS WITH EXCEPTIONAL FINANCIAL NEED. PELL GRANT RECIPIENTS WITH THE LOWEST EFC ARE CONSIDERED FIRST FOR A FSEOG

156
Q

FEDERAL TRADE COMMISSION (FTC)

A

WORKS FOR THE CONSUMER TO PREVENT FRAUDULENT, DECEPTIVE, AND UNFAIR BUSINESS PRACTICES IN THE MARKETPLACE AND TO PROVIDE INFORMATION TO HELP CONSUMERS IDENTIFY, PREVENT, AND AVOID THEM

157
Q

FEDERAL WORK-STUDY (FWS)

A

JOBS ON CAMPUS OR OFF CAMPUS FOR UNDERGRADUATE OR GRADUATE STUDENTS TO HELP STUDENTS PAY FOR THEIR EDUCATION EXPENSES. TO BE ELIGIBLE STUDENTS MUST HAVE FINANCIAL NEED

158
Q

FEE-ONLY

A

ALL OF THE CERTIFICANTS AND FIRMS COMPENSATION COMES EXCLUSIVELY FROM THE CLIENTS IN THE FORM OF FIXED, FLAT, HOURLY, PERCENTAGE OR PERFORMANCE BASED FEES, AND THE CERTIFICANT AND CERTIFICANTS FIRM DO NOT RECEIVE ANY FORM OF SALES-RELATED COMPENSATION

159
Q

FEE SIMPLE OWNERSHIP

A

THE COMPLETE OWNERSHIP OF PROPERTY WITH ALL THE RIGHTS ASSOCIATED WITH OUTRIGHT OWNERSHIP

160
Q

FELLOWSHIPS

A

PAID TO STUDENTS FOR WORK, SUCH AS TEACHING WHILE STUDYING FOR A MASTERS DEGREE OR CONDUCTING RESEARCH WHILE WORKING TOWARDS A DOCTORATE OF PHILOSOPHY DEGREE (PH.D.). FELLOWSHIPS CAN LAST ANYWHERE FROM A FEW WEEKS TO A FEW YEARS, DEPENDING ON THE DEPTH AND LEVEL OF WORK INVOLVED

161
Q

FIDUCIARY

A

AT ALL TIMES WHEN PROVIDING FINANCIAL ADVICE TO A CLIENT, A CFP PROFESSIONAL MUST ACT IN THE BEST INTEREST OF THE CLIENT. INCLUDES THE DUTY OF LOYALTY, DUTY OF CARE, AND DUTY TO FOLLOW CLIENT INSTRUCTIONS

162
Q

FINANCIAL DEPENDENCE

A

RELIANCE ON UNEARNED INCOME FROM ANOTHER PERSON TO THE EXTENT THAT IT CREATES ANXIETY AROUND THE FEAR OF BEING CUT OFF FROM THAT INCOME

163
Q

FINANCIAL ENABLING

A

OCCURS WHEN ONE INDIVIDUAL PROVIDES FINANCIAL ASSISTANCE THAT KEEPS OTHERS DEPENDENT

164
Q

FINANCIAL ENMESHMENT

A

OCCURS WHEN PARENTS INVOLVE CHILDREN IN ADULT FINANCIAL DECISIONS AND CONFLICTS AT A TIME WHEN THE CHILD IS NOT YET EMOTIONALLY AND COGNITIVELY PREPARED TO COPE WITH SUCH DECISIONS AND CONFLICTS

165
Q

FINANCIAL EXPLOITATION

A

THE FRAUDULENT OR OTHERWISE ILLEGAL, UNAUTHORIZED, OR IMPROPER ACT OR PROCESS OF AN INDIVIDUAL, INCLUDING A CAREGIVER OR FIDUCIARY, THAT USES THE RESOURCES OF AN OLDER INDIVIDUAL FOR MONETARY OR PERSONAL BENEFIT, PROFIT, OR GAIN, OR THAT RESULTS IN DEPRIVING AN OLDER INDIVIDUAL OF RIGHTFUL ACCESS TO, OR USE OF, BENEFITS, RESOURCES, BELONGINGS, OR ASSETS

166
Q

FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)

A

A SELF-REGULATORY ORGANIZATION FOR ALL SECURITY FIRMS DOING BUSINESS IN THE UNITED STATES

167
Q

FINANCIAL INFIDELITY

A

THE ACT OF ENGAGING IN SIGNIFICANT FINANCIAL TRANSACTIONS WITHOUT THE KNOWLEDGE AND SUPPORT OF A SPOUSE OR PARTNER

168
Q

FINANCIAL NEEDS METHOD

A

A METHOD THAT EVALUATES THE INCOME REPLACEMENT AND LUMP-SUM NEEDS OF SURVIVORS IN THE EVENT OF AN INCOME PRODUCERS UNTIMELY DEATH

169
Q

FINANCIAL PLAN

A

A WRITTEN DOCUMENT THAT GENERALLY SETS OUT A LIST OF RECOMMENDATIONS TO ACHIEVE A SET OF GOALS AND OBJECTIVES BASED ON AN UNDERSTANDING OF A CLIENTS CURRENT FINANCIAL AND PERSONAL SITUATION

170
Q

FINANCIAL PLANNING

A

DEFINED BY CFP BOARD AS A COLLABORATIVE PROCESS THAT HELPS MAXIMIZE A CLIENTS POTENTIAL FOR MEETING LIFE GOALS THROUGH FINANCIAL ADVICE THAT INTEGRATES RELEVANT ELEMENTS OF THE CLIENTS PERSONAL AND FINANCIAL CIRCUMSTANCES

171
Q

FINANCIAL RISK

A

THE AMOUNT OF LEVERAGE THE COMPANY IS USING IN ITS CAPITAL STRUCTURE. LEVERAGE IS A MEASURE OF THE AMOUNT OF DEBT A COMPANY USES TO CAPITALIZE THE BUSINESS

172
Q

FINANCIAL STATEMENT ANALYSIS

A

THE PROCESS OF CALCULATING FINANCIAL RATIOS AND COMPARING THE ACTUAL RATIOS TO INDUSTRY ESTABLISHED BENCHMARKS

173
Q

FINANCIAL STATEMENT AND RATIO ANALYSIS APPROACH

A

THE RATIO ANALYSIS PROVIDES AN OPPORTUNITY TO ASSESS THE CLIENTS STRENGTHS, WEAKNESSES, AND DEFICIENCIES WHEN THE CLIENTS RATIOS ARE COMPARED TO BENCHMARK METRICS. THE RATIO APPROACH USUALLY FOLLOWS THE PIE CHART APPROACH AND PROVIDES THE PLANNER WITH THE ACTUAL RATIOS WITH WHICH TO COMPARE THE BENCHMARKS IN THE METRICS APPROACH

174
Q

FINANCIAL THERAPY

A

A PROCESS INFORMED BY BOTH THERAPEUTIC AND FINANCIAL COMPETENCIES THAT HELPS PEOPLE THINK, FEEL, COMMUNICATE, AND BEHAVE DIFFERENTLY WITH MONEY TO IMPROVE OVERALL WELL-BEING THROUGH EVIDENCE-BASED PRACTICES AND INTERVENTIONS

175
Q

FINANCIAL WELL-BEING

A

A STATE OF BEING WHEREIN A PERSON CAN FULLY MEET CURRENT AND ONGOING FINANCIAL OBLIGATIONS, CAN FEEL SECURE IN THEIR FINANCIAL FUTURE, AND IS ABLE TO MAKE CHOICES THAT ALLOW THEM TO ENJOY LIFE

176
Q

FISCAL POLICY

A

REPRESENTS THE GOVERNMENTS POSITION ON WHETHER TO EXPAND OR CONTRACT THE ECONOMY. CONGRESS USES TAXES AND GOVERNMENT SPENDING TO IMPLEMENT ITS FISCAL POLICY

177
Q

FITNESS STANDARDS

A

ENSURE SPECIFIC CHARACTER AND FITNESS STANDARDS AS TO AN INDIVIDUALS CONDUCT BEFORE CERTIFICATION

178
Q

FIXED EXPENSES

A

THOSE EXPENSES THAT ARE DUE AND PAYABLE REGARDLESS OF WHETHER INCOME IS AVAILABLE TO COVER THE COST. THERE IS LESS DISCRETION OVER FIXED EXPENSES IN THE SHORT TERM. EXAMPLES OF FIXD EXPENSES INCLUDE MORTGAGE PAYMENT, CAR PAYMENT, BOAT PAYMENT, STUDENT LOAN PAYMENT, PROPERTY TAXES, AND INSURANCE PREMIUMS

179
Q

FIXED INCOME OR BOND FUNDS

A

TYPICALLY INVEST IN BONDS OF VARIOUS MATURITIES

180
Q

FLOOR

A

A MINIMUM AMOUNT THAT MUST BE EXCEEDED BEFOR EEXPENSES MAY BE DEDUCTIBLE. ONLY THE TOTAL EXPENSES ABOVE THE FLOOR AMOUNT MAY BE DEDUCTED

181
Q

FRAMING (OR THE FRAMING EFFECT)

A

A COGNITIVE BIAS UNDER WHICH THE MANNER IN WHICH SOMETHING IS FRAMED IMPACTS HOW THE CONTEXT IS EVALUATED OR INTERPRETED EVEN THOUGH THE SAME FACTS HAVE BEEN PROVIDED

182
Q

FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA)

A

A FORM USED TO DETERMINE A STUDENTS ELIGIBILITY FOR ALL TYPES OF FINANCIAL AID, INCLUDING GRANTS, WORK-STUDY, AND LOANS. THE FAFSA IS USED TO DETERMINE THE EXPECTED FAMILY CONTRIBUTION AMOUNT (EFC, PRIOR TO 2023; STUDENT AID INDEX (SAI) BEGINNING IN 2023)

183
Q

FRICTIONAL UNEMPLOYMENT

A

OCCURS WHEN PEOPLE ARE VOLUNTARILY UNEMPLOYED BECAUSE THEY ARE SEEKING OTHER JOB OPPORTUNITIES

184
Q

FULL EMPLOYMENT

A

THE RATE OF EMPLOYMENT THAT EXISTS WHEN THERE IS EFFICIENCY IN THE LABOR MARKET

185
Q

FUTURE VALUE

A

THE VALUE AT SOME POINT IN THE FUTURE OF A PRESENT AMOUNT OR AMOUNTS AFTER EARNING A RATE OF RETURN FOR A PERIOD OF TIME

186
Q

FUTURE VALUE OF AN ANNUITY DUE

A

THE FUTURE VALUE OF EQUAL PERIODIC DEPOSITS, MADE AT THE BEGINNING OF THE PERIOD

187
Q

FUTURE VALUE OF AN ORDINARY ANNUITY

A

THE VALUE OF EQUAL PERIODIC PAYMENTS OR DEPOSITS, AT SOME POINT IN THE FUTURE. THE FUTURE VALUE OF AN ORDINARY ANNUITY ASSUMES THAT DEPOSITS ARE MADE AT THE END OF A PERIOD OR END OF A YEAR

188
Q

FUTURES CONTRACT

A

A COMMITMENT TO DELIVER AN AMOUNT OF A CERTAIN ITEM AT A SPECIFIED DATE AT AN AGREED UPON PRICE

ChFC HS300 FP:PROCESS AND ENVIRONMENT (4 decks)

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