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ChFC HS300 FP:PROCESS AND ENVIRONMENT > FINANCIAL PLANNING M-P > Flashcards

FINANCIAL PLANNING M-P Flashcards

1
Q

MACROECONOMICS

A

THE STUDY OF LARGE ECONOMIC FACTORS THAT IMPACT THE ENTIRE ECONOMY SUCH AS GROSS DOMESTIC PRODUCT (GDP), UNEMPLOYMENT, AND INFLATION

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2
Q

MANAGING PARTNER

A

A PARTNER NAMED TO HAVE RESPONSIBILITIES FOR SPECIFIC TASKS OR FOR DAY-TO-DAY OPERATIONS

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3
Q

MARGINAL TAX RATE

A

THE HIGHEST TAX BRACKET IN WHICH A TAXPAYERS INCOME FALLS. IT IS THE RATE THAT WILL APPLY TO THE NEXT DOLLAR OF INCOME EARNED

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4
Q

MARKET PORTFOLIO

A

REPRESENTS 100% RISKY ASSETS

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5
Q

MARKET RISK

A

THE RISK THAT IN THE SHORT TERM, THE DAILY FLUCTUATIONS OF THE MARKET TEND TO BRING ALL SECURITIES IN THE SAME DIRECTION

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6
Q

MARRIED FILING JOINTLY FILING STATUS

A

A FILING STATUS THAT ALLOWS MARRIED COUPLES TO COMBINE THEIR GROSS INCOMES AND DEDUCTIONS

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7
Q

MARRIED FILING SEPERATELY FILING STATUS

A

A FILING STATUS USED WHEN MARRIED COUPLES DO NOT CHOOSE TO FILE A JOINT RETURN

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8
Q

METRICS APPROACH

A

THIS APPROACH USES THE QUANTITATIVE BENCHMARKS FOR A MEASUREMENT OF WHERE A CLIENTS FINANCIAL PROFILE SHOULD BE. WHEN COMBINED WITH THE TWO-STEP/ THREE-PANEL APPROACH, METRICS HELP ESTABLISH OBJECTIVES THAT ARE MEASURABLE COMPARED TO RATIO ANALYSIS

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9
Q

MICROECONOMICS

A

THE STUDY OF FACTORS THAT IMPACT SMALL OR INDIVIDUAL ECONOMIES, SUCH AS SUPPLY AND DEMAND FOR A PRODUCT

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10
Q

MODERN PORTFOLIO THEORY

A

A SET OF PRINCIPLES, IDEAS, AND THEORETICAL MODELS DEVELOPED TO HELP INVESTORS MAKE EFFICIENT AND INFORMED PORTFOLIO DECISIONS

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11
Q

MONETARY POLICY

A

REPRESENTS THE INTENDED INFLUENCE ON THE MONEY SUPPLY AND INTEREST RATES BY THE CENTRAL BANK OF A COUNTRY

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12
Q

MONEY MARKET MUTUAL FUNDS

A

INVESTS IN SHORT=TERM GOVERNMENT SECURITIES, CERTIFICATES OF DEPOSIT, COMMERCIAL PAPER AND BANKERS ACCEPTANCES

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13
Q

MONTE CARLO ANALYSIS

A

A MATHEMATICAL SIMULATION TO DETERMINE THE PROBABILITY OF SUCCESS OF A GIVEN PLAN. MONTE CARLO ANALYSIS IS USEFUL FOR FINANCIAL PLANNERS TO HELP MEASURE THE PROBABILITY OF ASSUMPTIONS BEING TRUE OR FALSE

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14
Q

MORAL HAZARD

A

A CHARACTER FLAW OR LEVEL OF DISHONESTY AN INDIVIDUAL POSSESSES THAT CAUSES OR INCREASES THE CHANCE FOR A LOSS

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15
Q

MORALE HAZARD

A

INDIFFERENCE TO LOSSES BASED ON THE EXISTENCE OF INSURANCE

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16
Q

MORTGAGES

A

A FORM OF LONG-TERM DEBT, SECURED BY A LIEN ON REAL ESTATE, SUCH AS A HOME

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17
Q

MOTIVATIONAL INTERVIEWING (MI)

A

A COMMUNICATION TECHNIQUE THE FOCUS OF WHICH IS ON GUIDING THE CLIENT TO EXPRESS THE DESIRE AND REASON A CHANGE IS NEEDED (THEIR MOTIVATION FOR CHANGE), TO DISCOVER THEIR ABILITY TO CHANGE, AND TO COMMIT TO MAKING THE CHANGE

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18
Q

MULTICULTURAL PSYCHOLOGY

A

AN EXTENSION OF GENERAL PSYCHOLOGY THAT RECOQNIZES THAT MULIPLE ASPECTS OF IDENTITY INFLUENCE A PERSONS WORLDVIEW, INCLUDING RACE, ETHNICITY, LANGUAGE, SEXUAL ORIENTATION, GENDER, AGE, DISABILITY, CLASS STATUS, EDUCATION, RELIGIOUS OR SPIRITUAL ORIENTATION, AND OTHER CULTURAL DIMENSIONS, AND THAT BOTH UNIVERSAL AND CULTURE-SPECIFIC PHENIMENA SHOULD BE TAKEN INTO CONSIDERATION WHEN PSYCHOLOGISTS ARE HELPING CLIENTS, TRAINING STUDENTS, ADVOCATING FOR SOCIAL CHANGE AND JUSTICE, AND CONDUCTING RESEARCH

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19
Q

MUNICIPAL BONDS

A

BONDS ISSUED TO FUND PROJECTS AND SPENDING FOR STATE OR LOCAL GOVERNMENTS. THE THREE PRIMARY TYPES OF MUNICIPAL BONDS ARE GENERAL OBLIGATION BONDS, REVENUE BONDS, AND PRIVATE ACTIVITY BONDS

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20
Q

NAMED-PERILS POLICY

A

A POLICY THAT PROVIDES PROTECTION AGAINST LOSSES CAUSED BY THE PERILS THAT ARE SPECIFICALLY LISTED AS COVERED IN THE POLICY

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21
Q

NATURAL RATE OF UNEMPLOYMENT

A

THE LOWEST UNEMPLOYMENT RATE WHERE LABOR AND PRODUCT MARKETS ARE IN BALANCE. AT THE NATURAL RATE OF UNEMPLOYMENT BOTH PRICE AND WAGE INFLATION ARE STABLE

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22
Q

NET DISCRETIONARY CASH FLOW

A

REPRESENTS THE AMOUNT OF CASH FLOW AVAILABLE AFTER ALL SAVINGS, EXPENSES, AND TAXES HAVE BEEN PAID

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23
Q

NET PRESENT VALUE (NPV)

A

MEASURES THE EXCESS OR SHORTFALL OF CASH FLOWS BASED ON THE DISCOUNTED PRESENT VALUE OF THE FUTURE CASH FLOWS, LESS THE INITIAL COST OR INVESTMENT. NPV USES THE INVESTORS REQUIRED RATE OF RETURN FOR SIMILAR PROJECTS AS THE DISCOUNT RATE

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24
Q

NET WORTH

A

A BALANCE SHEET CATEGORY THAT REPRESENTS THE AMOUNT OF TOTAL EQUITY (ASSETS - LIABILITIES= NET WORTH) A CLIENT HAS ACCUMULATED

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25
Q

NET WORTH-TO-TOTAL ASSETS RATIO

A

THE COMPLIMENT OF THE DEBT-TO-ASSETS RATIO. THESE TWO SHOULD ADD UP TO ONE. THIS PROVIDES THE PLANNER WITH THE PERCENTAGE OF TOTAL ASSETS OWNED OR PAID FOR BY THE CLIENT

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26
Q

NOMINAL GDP

A

MEASURES THE VALUE OF GOODS AND SERVICES IN CURRENT PRICES

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27
Q

NOMINAL INTEREST RATES

A

THE ACTUAL RATE OF RETURN EARNED ON AN INVESTMENT WITHOUT ADJUSTMENT FOR INFLATION

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28
Q

NON-DISCRETIONARY CASH FLOWS

A

MOSTLY FIXED EXPENSES WHICH ARE REQUIRED TO BE MET MONTHLY OR ANNUALLY REGARDLESS OF LOSS OF INCOME

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29
Q

NONREFUNDABLE TAX CREDITS

A

TAX CREDITS THAT CAN REDUCE THE TAX ON TAXABLE INCOME TO ZERO, BUT CANNOT GENERATE A TAX REFUND

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30
Q

NON-TRADITIONAL HOUSEHOLD

A

A BROAD PHRASE THAT MAY INCLUDE ANY HOUSEHOLD OTHER THAN THE TRADITIONAL HUSBAND, WIFE, AND CHILDREN. IT COULD BE HETEROSEXUAL OR HOMOSEXUAL COUPLES LIVING TOGETHER WITH OR WITHOUT CHILDREN. THE ADULTS MAY OR MAY NOT BE ROMANTICALLY INVOLVED, BUT MAY WISH TO INCLUDE EACH OTHER AND THEIR RESPECTIVE DECENDANTS IN THEIR ESTATE PLAN

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31
Q

NONVERBAL BEHAVIORS

A

NONVERBAL CUES, OR BODY LANGUAGE, CAN COMMUNICATE FEELINGS AND ATTITUDES FROM THE CLIENT TO THE FINANCIAL ADVISER AND ARE MAINLY PROVIDED FROM THE BODY AND THE VOICE. BODY POSITION AND BODY MOVEMENT ARE IMPORTANT, WHILE VOICE TONE AND VOICE PITCH ARE ALSO TELLING

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32
Q

NORMAL DISTRIBUTION

A

DESCRIBES HOW RETURNS ARE DISPERSED AROUND THE AVERAGE RETURN

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33
Q

NUDGE

A

CHOICE ARCHITECTURE THAT ALTERS PEOPLES BEHAVIOR IN A PREDICTABLE WAY WITHOUT FORBIDDING ANY OPTIONS OR SIGNIFICANTLY CHANGING THEIR ECONOMIC INCENTIVES. TO BE A NUDGE THE INTERVENTION MUST BE EASY AND CHEAP TO AVOID

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34
Q

NUNCUPATIVE WILL

A

ORAL WILL CONSISTING OF DYING DECLARATIONS

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35
Q

OPEN MARKET OPERATIONS

A

THE PROCESS BY WHICH THE FEDERAL RESERVE WILL BUY OR SELL U.S. TREASURY SECURITIES SUCH AS T-BILLS, NOTES, AND BONDS

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36
Q

OPEN QUESTIONS

A

RESULT IN A PERSON ANSWERING WITH A LENGTHY RESPONSE THAT USUALLY BEGIN WITH WORDS SUCH AS HOW, WHAT, WHEN, WHERE, WHO AND WHY

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37
Q

OPEN-END INVESTMENT COMPANY

A

ALSO REFERRED TO AS A MUTUAL FUND, IS AN INVESTMENT COMPANY WHERE INVESTORS PURCHASE THEIR SHARES FROM AND SELL THEM BACK TO THE MUTUAL FUND ITSELF

38
Q

OPEN-PERILS POLICIES

A

POLICIES THAT ARE CALLED “ALL RISKS” POLICIES, BECAUSE THEY COVER ALL RISKS OF LOSS (PERILS) THAT ARE NOT SPECIFICALLY EXCLUDED FROM THE CONTRACT

39
Q

OPERATING AGREEMENT

A

A WRITTEN AGRREMENT SIMILAR TO CORPORATE BYLAWS THAT SPECIFY THE RULES AND REGULATIONS FOR THE OPERATION OF AN LLC

40
Q

OPPORTUNITY COST

A

REPRESENTS THE VALUE OF THE BEST ALTERNATIVE THAT IS FOREGONE

41
Q

OPTIONS

A

INCLUDES BOTH CALLS AND PUTS

42
Q

ORDINARY ANNUITY

A

OCCURS WHEN THE TIMING OF THE FIRST PAYMENT IS AT THE END OF A PERIOD. THE PERIOD MAY BE, FOR EXAMPLE, THE END OF A MONTH OR AT THE END OF A YEAR

43
Q

ORDINARY ANNUITY PAYMENT FROM A LUMP-SUM DEPOSIT

A

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

44
Q

OSHA (OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION)

A

CREATED BY CONGRESS UNDER THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970 TO PROMOTE SAFE AND HEALTHY WORKING CONDITIONS FOR WORKERS BY PROVIDING TRAINING, OUTREACH, EDUCATION, AND ASSISTANCE

45
Q

OVERCONFIDENCE BIAS

A

USUALLY CONCERNMS AN INVESTOR THAT LISTENS MOSTLY TO HIMSELF OR HERSELF, OVERCONFIDENT INVESTORS MOSTLY RELY ON THEIR SKILLS AND CAPABILITIES TO DO THEIR OWN HOMEWORK OR MAKE THEIR OWN DECISIONS

46
Q

OVERREACTION

A

A COMMON EMOTION TOWARDS THE RECEIPT OF NEWS OR INFORMATION

47
Q

PASSIVE LISTENING

A

DESCRIBED AS LISTENING IN THE NORMAL OR USUAL CONVERSATION OR CONVERSATIONAL SETTING TO WHICH MOST PEOPLE ARE ACCUSTOMED AT SEMINARS, IN CLASS, AT SOCIAL GATHERINGS, OR AT SERMONS

48
Q

PERFORMANCE RATIOS

A

THESE RATIOS DETERMINE THE ADEQUACY OF RETURNS ON INVESTMENTS

49
Q

PERILS

A

THE PROXIMATE OR ACTUAL CAUSE OF LOSS, SUCH AS FIRE, LIABILITY, OR ACCIDENTAL DEATH

50
Q

PERSONAL AUTOMOBILE POLICY (PAP)

A

A PACKAGE POLICY THAT PROTECTS AGAINST LOSS DUE TO DAMAGE TO THE OWNED AUTOMOBILE, DAMAGE TO THE PROPERTY OF OTHERS, AND BODILY INJURY TO THE INSURED, FAMILY MEMBERS, AND OTHERS

51
Q

PERSONAL FINANCIAL PLANNING

A

THE PROCESS OF FORMULATING, IMPLEMENTING, AND MONITORING FINANCIAL DECISIONS INTEGRATED INTO A PLAN THAT GUIDES AN INDIVIDUAL OR A FAMILY TO ACHIEVE THEIR FINANCIAL GOALS

52
Q

PERSONAL LIABILITY UMBRELLA POLICY (PLUP)

A

A POLICY USUALLY SOLD IN MILLIONS OF DOLLARS OF COVERAGE (e.g. $1M, $3M, $5M) AND PROVIDES EXCESS LIABILITY COVERAGE AND LEGAL DEFENSE FOR LIABILITY CLAIMS THAT MAY ARISE AND THAT EXCEED THE LIMITS OF THE UNDERLYING HOMEOWNERS AND AUTOMOBILE POLICIES

53
Q

PERSONAL RISK

A

A RISK THAT MAY CAUSE THE LOSS OF INCOME (UNTIMELY DEATH, DISABILITY, HEALTH ISSUE), OR ALTERNATIVELY CAUSE AN INCREASE IN THE COST OF LIVING (DISABILITY, HEALTH ISSUES)

54
Q

PERSONAL RISK MANAGEMENT

A

A SYSTEMATIC PROCESS FOR IDENTIFYING, EVALUATING, AND MANAGING PURE RISK EXPOSURES FACED BY AN INDIVIDUAL

55
Q

PERSONAL USE ASSETS

A

A BALANCE SHEET CATEGORY THAT INCLUDES THOSE ASSETS THAT HELP TO MAINTAIN THE CLIENTS LIFESTYLE

56
Q

PHASE-OUT

A

A GRADUAL REDUCTION OF A TAX CREDIT OR DEDUCTION AS INCOME RISES. USED AS A MEANS TO LIMIT CERTAIN TAX BENEFITS TO THE MIDDLE CLASS BY ELIMINATING THEM FOR HIGH INCOME TAXPAYERS

57
Q

PHYSICAL HAZARD

A

A TANGIBLE CONDITION OR CIRCUMSTANCE THAT INCREASES THE PROBABILITY OF A PERIL OCCURING AND/ OR THE SEVERITY OF DAMAGES THAT RESULT FROM A PERIL

58
Q

PIE CHART APPROACH

A

THIS APPROACH IS A VISUAL PRESENTATION OF HOW THE CLIENT ALLOCATES FINANCIAL RESOURCES. IT PROVIDES A BROAD PERSPECTIVE ON THE CLIENTS FINANCIAL STATUS AND IT IS GENERALLY USED AFTER THE COLLECTION OF INTERNAL DATA AND THE PREPARATION OF FINANCIAL STATEMENTS

59
Q

PIERCING THE VEIL

A

OCCURS WHEN A COURT DISREGARDS THE STATUS OF THE ENTITY THAT GIVES THE OWNERS LIMITED LIABILITY BECAUSE THE OWNERS FAILED TO MAINTAIN A CLEAR AND CONSISTENT IDENTITY FOR THE ENTITY

60
Q

PLUS LOANS

A

LOANS FOR PARENTS TO BORROW TO HELP PAY FOR A DEPENDENTS UNDERGRADUATE EDUCATION EXPENSES. PLUS LOANS ARE NOT BASED ON FINANCIAL NEED, BUT REQUIRE THAT THE PARENT DOES NOT HAVE ANY ADVERSE CREDIT HISTORY

61
Q

POINTS

A

ONE POINT IS EQUAL TO ONE PERCENT OF THE LOAN AMOUNT, OFTEN ASSOCIATED WITH A MORTGAGE. POINTS ARE PREPAID INTEREST, USUALLY PAID AT CLOSING, IN EXCHANGE FOR A LOWER INTEREST RATE ON THE LOAN

62
Q

POOLED TRUST

A

AN EXCEPTION THAT RESULTED FROM THE OMNIBUS BUDGET AND RECONCILIATION ACT OF 1993; MANAGED BY A NONPROFIT ASSOCIATION. WHILE EACH BENEFICIARY WILL HAVE THEIR OWN ACCOUNT, THE ASSETS WILL GENERALLY BE POOLED AND MANAGED TOGETHER

63
Q

POSITIVE PSYCHOLOGY

A

THE SCIENTIFIC STUDY OF THE STRENGTHS THAT ENABLE INDIVIDUALS AND COMMUNITIES TO THRIVE. THE FIELD IS FOUNDED ON THE BELIEF THAT PEOPLE WANT TO LEAD MEANINGFUL AND FULFILLING LIVES, TO CULTIVATE WHAT IS BEST WITHIN THEMSELVES, AND TO ENHANCE THEIR EXPERIENCES OF LOVE, WORK, AND PLAY

64
Q

POWER OF APPOINTMENT

A

A POWER TO APPOINT THE ASSETS OF ONE PERSON TO ANOTHER AND MAY BE EITHER GENERAL OR LIMITED

65
Q

POWER OF ATTORNEY

A

LEGAL DOCUMENT THAT AUTHORIZES AN AGENT TO ACT ON A PRINCIPALS BEHALF

66
Q

PRACTICE STANDARDS

A

THE PRACTICE STANDARDS SET FORTH THE FINANCIAL PLANNING PROCESS. A CFP PROFESSIONAL MUST COMPLY WITH THE PRACTICE STANDARDS WHEN PROVIDING FINANCIAL PLANNIING , OR FINANCIAL ADVISE THAT REQUIRES FINANCIAL PLANNING, OR WHEN THE CLIENT HAS A REASONABLE BASIS TO BELIEVE THE CFP PROFESSIONAL WILL PROVIDE OR HAS PROVIDED FINANCIAL PLANNING

67
Q

PRE-2019 STANDARDS OF PROFESSIONAL CONDUCT

A

PRIOR TO OCTOBER 2019, CFP BOARDS STANDARDS OF PROFESSIONAL CONDUCT WERE COMPRISED OF THREE CATEGORIES: 1) THE CODE OF ETHICS, 2) THE RULES OF CONDUCT, AND 3)THE FINANCIAL PLANNING PRACTICE STANDARDS

68
Q

PREPAID TUITION PLAN

A

A PLAN THAT WILL ALLOW A PARENT TO PURCHASE COLLEGE CREDITS TODAY AND USE THOSE CREDITS WHEN THE CHILD ATTENDS COLLEGE

69
Q

PRESENT VALUE

A

THE VALUE TODAY OF ONE OR MORE FUTURE CASH PAYMENTS DISCOUNTED AT AN INTEREST RATE

70
Q

PRESENT VALUE OF A FUTURE AMOUNT

A

THE CURRENT VALUE TODAY OF A FUTURE AMOUNT. THE FUTURE AMOUNT IS DISCOUNTED OVER TIME USING A DISCOUNT RATE (AN INTEREST RATE THAT REFLECTS THE INDIVIDUALS RISK OR OPPORTUNITY COST THAT COULD BE EARNED ON A SIMILAR PROJECT OR INVESTMENT) TO ARRIVE AT THE PRESENT VALUE

71
Q

PRESENT VALUE OF AN ANNUITY DUE

A

THE TIMING OF THE FIRST PAYMENT IS AT THE BEGINNING OF A TIME PERIOD (TODAY) REPRESENTING TODAYS VALUE OF THAT EVEN CASH FLOW STREAM. ON A TIMELINE, THE FIRST PAYMENT OCCURS AT TIME PERIOD ZERO (NOW)

72
Q

PRESENT VALUE OF AN ORDINARY ANNUITY

A

TODAYS VALUE OF AN EVEN CASH FLOW STREAM RECEIVED OR PAID OVER TIME. THE PRESENT VALUE OF AN ORDINARY ANNUITY ASSUMES THAT THE FIRST PAYMENT IS MADE AT THE END OF A PERIOD

73
Q

PRESENT VALUE OF GOALS APPROACH

A

THIS APPROACH CONSIDERS EACH SHORT-TERM, INTERMEDIATE-TERM, AND LONG-TERM GOAL, DETERMINES THEIR RESPECTIVE PRESENT VALUE, THEN SUMS ALL OF THESE TOGETHER AND TREATS THE SUM AS AN OBLIGATION (LIABILITY) THAT IS THEN REDUCED BY CURRENT RESOURCES OF INVESTMENT ASSETS AND CASH AND CASH EQUIVALENTS

74
Q

PRESUMPTIVE BAR LIST

A

CFP BOARDS LIST OF CONDUCT THAT IS PRESUMED TO BE UNACCEPTABLE AND WILL BAR AN INDIVIDUAL FROM BECOMING CERTIFIED UNLESS THAT INDIVIDUAL FILES A PETITION FOR FITNESS DETERMINATION REQUEST

75
Q

PRICE EARNINGS (P/E) APPROACH

A

VALUING EQUITY SECURITIES IS AN EARNINGS-BASED VALUATION MODEL THAT PLACES A PREMIUM ON THE AMOUNT INVESTORS ARE WILLING TO PAY FOR EACH DOLLAR OF EARNINGS

76
Q

PRINCIPAL

A

THE GRANTOR OF A POWER OF ATTORNEY

77
Q

PRIVATE ACTIVITY BONDS

A

BONDS ISSUED TO FINANCE A JOINT PROJECT BETWEEN THE PRIVATE SECTOR AND A MUNICIPALITY. PRIVATE ACTIVITY BONDS ARE OFTEN ISSUED TO FUND THE BUILDING OF PROFESSIONAL SPORTS STADIUMS

78
Q

PRIVATE CENSURE

A

AN UNPUBLISHED WRITTEN REPROACH MAILED BY THE COMMISSION TO A CENSURED RESPONDENT

79
Q

PROBATE PROCESS

A

THE LEGAL PROCEEDING THAT SERVES TO PROVE THE VALIDITY OF EXISTING WILLS, SUPERVISE THE ORDERLY DISTRIBUTION OF DECENDENTS ASSETS TO THE HEIRS, AND PROTECT CREDITORS BY INSURING THAT VALID DEBTS OF THE ESTATE ARE PAID

80
Q

PROCEDURAL RULES

A

PROVIDE DETAILED PROCEDURES FOLLOWED BY CFP BOARD IN ENFORCING THE CODE OF ETHICS AND STANDARDS OF CONDUCT, EFFECTIVE JUNE 2020

81
Q

PROCESS OF FINANCIAL PLANNING

A

THE PROCESS OF FINANCIAL PLANNING INCLUDES: 1) UNDERSTANDING THE CLIENTS PERSONAL AND FINANCIAL CIRCUMSTANCES, 2) IDENTIFYING AND SELECTING GOALS, 3) ANALYZING THE CLIENTS CURRENT COURSE OF ACTION AND POTENTIAL ALTERNATIVE COURSES OF ACTION, 4) DEVELOPING THE FINANCIAL PLANNING RECOMMENDATIONS, 5) PRESENTING THE FINANCIAL PLANNING RECOMMENDATIONS, 6) IMPLEMENTING THE FINANCIAL PLANNING RECOMMENDATIONS, AND 7) MONITORING PROGRESS AND UPDATING

82
Q

PRODUCER PRICE INDEX (PPI)

A

MEASURES THE INFLATION RATE FOR RAW MATERIALS USED IN MANUFACTURING

83
Q

PROFESSIONALISM

A

REQUIRES BEHAVING WITH DIGNITY, COURTESY, AND RESPECT TO CLIENTS, FELLOW PROFESSIONALS, AND OTHERS IN BUSINESS-RELATED ACTIVITIES

84
Q

PROFESSIONALS ELIGIBLE FOR REINSTATEMENT (PER)

A

FORMALLY REFERRED TO AS REGISTRAINTS, AN INDIVIDUAL WHO, THOUGH NOT CURRENTLY CERTIFIED, HAS BEEN CERTIFIED BY CFP BOARD IN THE PAST AND HAS AN ENTITLEMENT TO POTENTIALLY USE THE CFP MARKS. THIS INCLUDES INDIVIDUALS WHO HAVE RELINQUISHED THEIR CERTIFICATION AND WHO ARE ELIGIBLE FOR REINSTATEMENT WITHOUT BEING REQUIRED TO PASS THE CURRENT CFP CERTIFICATION EXAMINATION

85
Q

PROPERTY RISK

A

A RISK THAT MAY CAUSE THE LOSS OF PROPERTY (AUTOMOBILE, HOME, OR OTHER ASSET)

86
Q

PROSPECT THEORY

A

PROVIDES THAT PEOPLE VALUE GAINS AND LOSSES DIFFERENTLY AND WILL BASE THEIR DECISIONS ON PERCEIVED GAINS RATHER THAN PERCEIVED LOSSES

87
Q

PUBLIC CENSURE

A

A WRITTEN REPROACH PUBLISHED IN A PRESS RELEASE AND ON CFP BOARDS WEBSITE

88
Q

PURCHASING POWER PRESERVATION MODEL (PPP)

A

A CAPITAL NEEDS ANALYSIS METHOD THAT ASSUMES THAT AT A CLIENTS LIFE EXPECTANCY, THE CLIENT WILL HAVE A CAPITAL BALANCE WITH PURCHASING POWER EQUAL TO THE PURCHASING POWER AT THE BEGINNING OF RETIREMENT

89
Q

PURCHASING POWER RISK

A

THE RISK THAT INFLATION WILL CAUSE PRICES TO INCREASE AND A DOLLAR TODAY WILL NOT BE ABLE TO PURCHASE THE SAME AMOUNT OF GOODS AND SERVICES TOMORROW

90
Q

PURE ANNUITY CONCEPT

A

THE BASIC CAPITAL NEEDS ANALYSIS APPROACH WHICH ASSUMES A LUMP SUM BALANCE AT RETIREMENT WILL PROVIDE INCOME FOR A SET PERIOD OF TIME (BASED ON THE ESTIMATE LIFE EXPECTANCY) AND AT THE END OF THAT TIME FRAME THE ACCOUNT BALANCE WILL BE ZERO

91
Q

PURE RISK

A

A RISK FOR WHICH THERE IS A POSSIBILITY OF LOSS, BUT NO POSSIBILITY OF GAIN. THE POSSIBILITY OF A HOME BEING DAMAGED OR DESTROYED BY A FIRE IS AN EXAMPLE OF A PURE RISK. MOST PURE RISKS ARE INSURABLE

92
Q

PUTS

A

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

ChFC HS300 FP:PROCESS AND ENVIRONMENT (4 decks)

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