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Wrong Answer Deck > General Practice > Flashcards

General Practice Flashcards

1
Q

GP Ch 1 List the financial planning process.

A
  1. Understanding
  2. Identify and Select Goals
  3. Analyze
  4. Develop
  5. Present
  6. Implement
  7. Monitor
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2
Q

GP QUIZ 2 What must a CFP professional provide in writing and what can be written/orally provided?

A

Written or orally- Material conflicts of interest.
Written- Firms privacy policy, compensation, any bankruptcies or disciplinary action.

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3
Q

GP Quiz 2 What dovetails with the steps of the financial planning process?

A

The Practice standards - it explains how to perform each step of the financial planning process.

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4
Q

GP Quiz 2 How is a Fee Based planner compensated?

A

Fees and commission

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5
Q

GP 3-2 What’s on a cash flow statement?

A

Inflows- Outflows =Savings

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6
Q

GP 3-9 Checking account 3k, money market 12k, 401k 50k, Muni Bond 20k, credit card debt 5k, mortgage 50k…what’s the current ratio?

A

7….Bond is included as current asset

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7
Q

GP 4-3 Invested 25k in a mutual fund. Earns 12% annual rate compounded monthly. 5 years. What will the amount be at end of 5 years?

A

$45,417.42

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8
Q

GP 4-7 Calculate Real Rate of return

A

1+ after-tax return/1+ inflation rate then subtract 1 then multiply by 100

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9
Q

GP 4-10 Positive cash flow 6k,7k, 8k, over a 3 year period. Then at the end of 3 years sold it for 125k. Requires 12% return. What should he pay for investment?

A

98,486.47
0cfj, 6,000cfj, 7000cfj, 123000cfj, 12 I/YR, Gold NPV

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10
Q

GP 4-13 if NPV is equal to zero and 12% was the required rate of return. What can you conclude?

A

IRR is 12%. NPV is zero which means the IRR equaled the required rate.

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11
Q

GP 4-14 clients want to retire in 10 years. Current portfolio 1 million. During retirement they will draw 150k per year for 25 years then pass away with 1 million. What is the return they need to achieve?

A

6.88%
-1millionCfj, 0cfj, 10 good Nj, 150k Cfj, 25 good nj, 1 million cfj, Gold IRR/yr

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12
Q

GP 6-6 What is the maximum amount 1 grandparent can contribute in 1 year to a 529? How about both?

A

90k, 180k

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13
Q

GP 6-7 What is the maximum amount that can be contributed on behalf of a child from all sources combined into a Coverdell ESA?

A

$2000

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14
Q

GP 6-9 For ESA plans. When must the funds be used by? What is the phaseout? What expenses can it be used on?

A

Age 30, 190k- 220k MFJ, Elementary and secondary needs as well as college

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15
Q

GP 6-9 How is the gift to an ESA considered ? (Present or future interest?

A

Contributions are considered a gift if present interest

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16
Q

GP 6-10 UTMA/UGMA accounts. Which one can hold real estate?

A

UTMA

17
Q

GP 6-17 Due to coordination rules in education planning. What combination of plans should you not choose?

A

Don’t select answers that include American opportunity credit, lifetime, coverdell ESA, or qualified tuition distribution. (In the same year)

18
Q

GP Ch 6 quiz. Kid is 2. Will attend 4 year college. 12,500 in todays dollar costs. 8% investment yield, 5% inflation on college costs for 20 years. What is the lump sum needed now to fund college?

A

30,555
1- 12,500, 16yrs, 5% = 27,285.93
2- 27,285.93 2.8571%, 4yrs = 104,679.76
3- 104,679.76, 16yrs, 8% = 30,555

19
Q

GP 7-13 CPI or PPI, which one leads the other?

A

PPI leads CPI

20
Q

GP Quiz 7 What is an example for qualifying for compensatory damages?

A

Age discrimination

21
Q

GP Quiz 7 Work related payout compensatory damage of 1 million. Settlement awarded in a single premium annuity. How is this taxed?

A

100% excludable because it’s a single premium annuity that a party is obligated to pay.

22
Q

GP quiz 7 Lottery payout chosen as annuity payout. How is it taxed?

A

The payment received each year

23
Q

GP quiz 7 What are some economic indicators.

A

SNP 500, supplier delivery days, initial unemployment claims. Yield curve isn’t

24
Q

GP 8-3 client obtains 100k 15 yr fixed 7.5% interest loan. How much interest will be paid during the life of the loan?

A

$66,861
12 gold P/yr, PV -100k, 7.5% I/yr, 15gold xp/yr, PMT?

$927.01x180 then subtract 100k

25
Q

GP Quiz 9 If adviser doesn’t charge commission and gives advice and charges a fee. How must he register?

A

As and IAR. Doesn’t need to register with FINRA

26
Q

GP Quiz 9 what does ADV Part 1 entail?

A

The applicants business address and background. Part 2 spells out compensation.

27
Q

GP Quiz 9 Which act requires persons or firms advising others about securities investments must register with the securities and exchange commission?

A

The Investment Advisers Act of 1940

28
Q

GP Quiz 10 What is written, explicit direction from the insurance company to the agent described as?

A

Express authority

29
Q

GP Quiz 10 The term that describes the obligation of the agent to the principal?

A

Loyalty, Express

Wrong Answer Deck (6 decks)

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