General Principles / Code of Ethics / Behavioral Finance

Question 1

Repayment on federal student loans

Answer 1

Repayment on federal student loans generally does not begin until after you leave college or drop below half-time enrollment.

Question 2

Truth in Lending Act aka

Answer 2

Consumer Credit Protection Act

Question 3

Step 1 college calculation

Answer 3

Determine the cost of the first year of college

Solve for FV

“Inflate”

Question 4

Step 2 college calculation

Answer 4

Determine the amount that must be available when the child starts college

Real rate of return

Begin mode

Solve for PV

“I need”

Question 5

Step 3 college calculation

Answer 5

Determine how much the parents need to save

Solve for PV unless they ask how much they need annually

“Invest”

Question 6

Emergency Fund Ratio

Answer 6

Emergency fund ratio (EFR) = current assets ÷ nondiscretionary monthly expenses

Question 7

Strategic management approach

Answer 7

In this approach, the client’s goals and values drive the client-planner relationship and the planner serves as a consultant

Question 8

Cognitive-behavioral approach

Answer 8

The cognitive-behavioral approach believes a client’s attitudes, beliefs, and values influence their behavior and tries to replace negative beliefs with positive attitudes that should result in better financial results.