Fundamentals and Insurance

Question 1

Name 4 Elements of the CFP Code of Ethics

Answer 1

• Honesty
• Integrity
• Competence
• Diligence

Question 2

Elements of Fiduciary Duty

Answer 2

• Loyalty
• Care
• Follow Instruction

Question 3

which of the following may rarely result in the delay or denial of certification?

1. Customer complaints
2. Misdemeanor convictions
3. Employer investigations and terminations

a. 1 only
b. 2 only
c. 1 and 3
d. 1,2,3

Answer 3

D

Question 4

Is the CFP required to report misleading employer advertisements?

Answer 4

No, the CFP is required to correct misrepresentations to his clients

Question 5

What defines a Recession?

Answer 5

6 months or two quarters of declining GDP

Question 6

What defines a Depression?

Answer 6

18 months or 6 quarters of declining GDP

Question 7

A increase in the Reserve Requirement would have what kind of effect on the Money Supply and Interest Rates

Answer 7

Money Supply: Decrease

Interest Rates: Increase

Question 8

A increase in the Discount Rate would have what kind of effect on the Money Supply and Interest Rates

Answer 8

Money Supply: Decrease

Interest Rates: Increase

Question 9

Sales of Treasuries in Open Markets would have what kind of effect on the Money Supply and Interest Rates

Answer 9

Money Supply: Decrease

Interest Rates: Increase

Question 10

A increase in the Excess Reserve Rate would have what kind of effect on the Money Supply and Interest Rates

Answer 10

Money Supply: Decrease

Interest Rates: Increase

Question 11

A decrease in the Reserve Requirement would have what kind of effect on the Money Supply and Interest Rates

Answer 11

Money Supply: Increase

Interest Rates: Decrease

Question 12

A decrease in the Discount Rate would have what kind of effect on the Money Supply and Interest Rates

Answer 12

Money Supply: Increase

Interest Rates: Decrease

Question 13

Buying of Treasuries in Open Markets would have what kind of effect on the Money Supply and Interest Rates

Answer 13

Money Supply: Increase

Interest Rates: Decrease

Question 14

A decrease in the Excess Reserve Rate would have what kind of effect on the Money Supply and Interest Rates

Answer 14

Money Supply: Increase

Interest Rates: Decrease

Question 15

What debts are NOT discharged through Chapter 7 Bankruptcy

Answer 15

• Student and Government Loans
• 3 years of back taxes
• Alimony and Child Support
• Monies owed due to malicious acts, drunk driving, criminal fines and penalties, or embezzlement

Question 16

What property is exempt from creditors?

Answer 16

• Homestead
• Life Insurance
• Qualified Plans
• IRAs up to $1,362,800

Question 17

Which of the following would cause the demand curve to shift to the right?
A) Increased savings rate
B) Decreased tax rate
C) Price change
D) More Suppliers

Answer 17

B
Anytime consumers have more money in their pocket, the demand curve is going to shift up and to the right. A decrease in the tax rate puts more spending money in the consumers pocket.

Question 18

5 most important types of Financial Aid Programs

Answer 18

• Federal Pell Grant
• Stafford Loan
• Parent Loans for Undergraduate Students (PLUS)
• Grad PLUS loan for graduate students (PLUS Direct)
• Federal Perkins Loan Program (expired 2017)

Question 19

Is the Federal Pell Grant needs based? Yes/No

Answer 19

Yes

Question 20

Is the Stafford Loan needs based? Yes/No

Answer 20

Subsidized - Yes

Unsubsidized - No

Question 21

is the Parent Loans for Undergraduate Students (PLUS) needs based? Yes/No

Answer 21

No