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Aprils FC For Danko CFP > I Will Know These > Flashcards

I Will Know These Flashcards

1
Q

PITI

A
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2
Q

Nouns used with CFP

A 
Certificant 
Practitioner
Professional
Certification
Mark
Exam
Registrant*
(Not currently certified but certified by CFP Board in the past and generally entitled to use the CFP marks
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3
Q

Investing by age for kids education

A 
<13y = Equities
14-17y = Fixed Income
17y+ = Cash
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4
Q

SEC

A

• Regulates disclosure requirements (ADV)

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5
Q

Series 6

A

Mutual Funds
UITs
New Issue Variables
Open Ended Funds, 529s

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6
Q

Series 7

A

General securities
2ndary UITs
Closed End MF

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7
Q

Series 63

A

Blue Sky

Uniform Securities Agent State Law Exam

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8
Q

Series 65

A

Uniform Investment Advisor Exam

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9
Q

Series 66

A

Combines 63 & 66

Uniform Combined state paw exam

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10
Q

CFP Revocation

A

PERMANENT!

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11
Q 
*Behavioral Finance*
Life change
Job change
Divorce
Move
A

Gather new data
Reevaluate
Reestablish the scope of the relationship

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12
Q

CFP Suspension

A

30 days to appeal suspension
Automatically Published
CFP practitioner must notify their clients

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13
Q

Heuristics

A

A strategy that ignores part of the information.

  • Trial and error
  • Rule of thumb
  • Educated guess.
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14
Q

Anchoring

A

Becoming attached to a specific price as the fair value of a holding

Handling it:
Force yourself to evaluate an investment only as if you were making the purchase no.

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15
Q

Attachment Bias

A

My grandfather left me this stock so I can never sell it

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16
Q

Endowment Bias*

A

Feeling that because you own the asset, it is more valuable and special since it is yours.
“Inherited a family summer home and wouldn’t ever sell it even though it is a money pit”

17
Q

Cognitive Dissonance

A

Remembering the positive part of an experience but forgetting the negative

  • Domestic Abuse *
18
Q

Confirmation Bias

A

Tendency to accept any info that confirms preconceived position or opinion

19
Q

Diversification Errors

A

Tend to diversify evenly across whatever options are available

20
Q

Fear of Regret

A

Tendency to take no action rather than risk making the wrong one

21
Q

Gambler’s Fallacy

A

Onset of certain random event is likely to happen following an event or series of events
“Liquidate a position after it goes up. It is likely to DROP”

22
Q

Herd Behavior

A

FOMO

  • Tech Bubble
  • Crypto
23
Q

Hindsight Bias

A

Looking at a past event and thinking we understand it, when in reality we may not.

People now claim they saw signs of the tech bubble of the 90s = creating over confidence

24
Q

Inappropriate Extrapolation

A

Tendency to look at recent events and assume that those conditions will continue indefinitely

25
Q

Analysis Paralysis

A

Hold that a superior solution is a short step away, and sill in its endless pursuit with no concept of diminishing returns.

26
Q

Mental Accounting

A

Looking at sums of money differently, depending on their source or the intended use

27
Q

Outcome Bias

A

Investor wants to double his money in an investment without doing adequate research

28
Q

Self-Affirmation Bias

A

Belief that when something goes right, it is because you were smart and made the right decision.
If it does not work out, it is someone else’s fault, or simply bad luck.

29
Q

Risk Capacity v Risk Tolerance

A

Capacity - NEED TO TAKE

Tolerance - WANT TO TAKE

30
Q

CFP Unable to attain the information needed

A
  1. Terminate the relationship

2. Limit the scope to those able to provide

31
Q

College Tuition
Retirement Benef Received
Family Needs

Begin or End Mode

A

Begin Mode

32
Q

401k deferrals
Profit-sharing Contributions
Bond interest paid
Mortgage Payments

Begin or End Mode

A

End Mode

33
Q

Deduction v Credit Calculations

A

(Deduction)(tax bracket) = equiv Credit

Tax Credit / tax bracket = equiv Deduct

Aprils FC For Danko CFP (1 decks)

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