1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
FPQP Exam Study Set Exam (2026) Exam
Questions & Answers | Latest Already Graded A+
UPDATE 2025|2026!!
Save
Terms in this set (169)
Abbreviation for the Financial Umbrella's
Planning process In
A
Downpour
Prevent
Immense
Mess
What are the steps in the Financial - Understand the client's situation
Planning process? - Identify the goals of the clients
- Analyze the client's course & potential alternative
courses
- Develop financial planning recommendations
- Present recommendations
- Implement the recommendations
- Monitor progress & update the implemented
recommendations
Basic Liquidity Ratio = Liquid Assets/Monthly Expenses
- should be 3% or above
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 1/40
,1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
Savings Ratio = savings & investments / annual gross income
- should have a minimum of 10%
Front-End Debt-to-Income Ratio = PITI (housing costs) / annual gross income
- housing cost ratio
- should be maximum of 28% of gross income
What is PITI in the front-end ratio? - Principle, Interest, Taxes, Insurance
- Principle & Interest = mortgage loan payment
Back-End Debt-to-Income Ratio = annual debt repayments / annual gross income
- total debt ratio
- debt repayment = any loan payment (home, auto,
student, etc.)
Nonmortgage Debt-to-Income Ratio = annual non-mortgage debt repayment / annual
net income
- consumer ratio
- should be maximum of 20% of net income
- non-mortgage = non-home (auto, student, etc.)
Fair Credit Billing Act Provides consumers with a means to dispute a
billing error on open-ended credit accounts (credit
and charge cards)
What is included on the Statement of Assets, Liabilities & Net Worth
Financial Position (SFP)?
What is the SFP also known as? Balance Sheet
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 2/40
,1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
What is included in the Assets - cash/cash equivalents
portion of the SFP? - invested assets
- use assets
What is an invested asset? Assets that are not for personal use of the family
and cannot be readily converted into cash in case
of an emergency.
ex. stocks & bonds, 401k, IRA, vested pension
benefits, investment real estate, etc.
What is a use asset? Asset that is intended primarily for the personal use
or enjoyment of the family.
ex. personal property, automobiles, family
residence, etc.
What is included on the Cash Flow Inflows & Outflows
Statement (CFS)?
What are the different types of - fixed (rent, alimony, child support, loan payments,
outflows on a CFS? etc.)
- variable (utilities, food, transportation,
entertainment, etc.)
What are the types of personal risk? - Unemployment
- Disability
- Death
- Divorce
- Catastrophic Losses (medical expenses, natural
disasters, etc.)
- Negligence
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 3/40
, 1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
Rules of Risk Management - Don't risk more than you can afford to lose
- Don't risk a lot for a little
- Consider the odds
What are the types of negligence in In order to collect damages from negligence, all 4
personal risk? must be proven:
- existence of a legal duty
- failure to perform a legal duty
- actual damage is caused
- proximate cause is established
2 Parts of the Risk Management - forecasting & evaluating financial risks
Process - identifying ways to either avoid or minimize their
impact
Risk Management Techniques - Retention (keeping the risk for yourself)
- Reduction (decreasing the amount of risk; ie,
wearing a helmet)
- Avoidance ( finding a way around the risk; ie,
don't drive/ don't participate)
- Transfer (transferring the risk; ie, insurance)
Categories of Risk Management Risk Control (avoidance & reduction)
Techniques
Risk Financing (retention & transfer)
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 4/40
FPQP Exam Study Set Exam (2026) Exam
Questions & Answers | Latest Already Graded A+
UPDATE 2025|2026!!
Save
Terms in this set (169)
Abbreviation for the Financial Umbrella's
Planning process In
A
Downpour
Prevent
Immense
Mess
What are the steps in the Financial - Understand the client's situation
Planning process? - Identify the goals of the clients
- Analyze the client's course & potential alternative
courses
- Develop financial planning recommendations
- Present recommendations
- Implement the recommendations
- Monitor progress & update the implemented
recommendations
Basic Liquidity Ratio = Liquid Assets/Monthly Expenses
- should be 3% or above
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 1/40
,1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
Savings Ratio = savings & investments / annual gross income
- should have a minimum of 10%
Front-End Debt-to-Income Ratio = PITI (housing costs) / annual gross income
- housing cost ratio
- should be maximum of 28% of gross income
What is PITI in the front-end ratio? - Principle, Interest, Taxes, Insurance
- Principle & Interest = mortgage loan payment
Back-End Debt-to-Income Ratio = annual debt repayments / annual gross income
- total debt ratio
- debt repayment = any loan payment (home, auto,
student, etc.)
Nonmortgage Debt-to-Income Ratio = annual non-mortgage debt repayment / annual
net income
- consumer ratio
- should be maximum of 20% of net income
- non-mortgage = non-home (auto, student, etc.)
Fair Credit Billing Act Provides consumers with a means to dispute a
billing error on open-ended credit accounts (credit
and charge cards)
What is included on the Statement of Assets, Liabilities & Net Worth
Financial Position (SFP)?
What is the SFP also known as? Balance Sheet
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 2/40
,1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
What is included in the Assets - cash/cash equivalents
portion of the SFP? - invested assets
- use assets
What is an invested asset? Assets that are not for personal use of the family
and cannot be readily converted into cash in case
of an emergency.
ex. stocks & bonds, 401k, IRA, vested pension
benefits, investment real estate, etc.
What is a use asset? Asset that is intended primarily for the personal use
or enjoyment of the family.
ex. personal property, automobiles, family
residence, etc.
What is included on the Cash Flow Inflows & Outflows
Statement (CFS)?
What are the different types of - fixed (rent, alimony, child support, loan payments,
outflows on a CFS? etc.)
- variable (utilities, food, transportation,
entertainment, etc.)
What are the types of personal risk? - Unemployment
- Disability
- Death
- Divorce
- Catastrophic Losses (medical expenses, natural
disasters, etc.)
- Negligence
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 3/40
, 1/3/26, 10:41 AM FPQP Exam Study Set Exam (2026) Exam Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026!! Flashcards | Qu…
Rules of Risk Management - Don't risk more than you can afford to lose
- Don't risk a lot for a little
- Consider the odds
What are the types of negligence in In order to collect damages from negligence, all 4
personal risk? must be proven:
- existence of a legal duty
- failure to perform a legal duty
- actual damage is caused
- proximate cause is established
2 Parts of the Risk Management - forecasting & evaluating financial risks
Process - identifying ways to either avoid or minimize their
impact
Risk Management Techniques - Retention (keeping the risk for yourself)
- Reduction (decreasing the amount of risk; ie,
wearing a helmet)
- Avoidance ( finding a way around the risk; ie,
don't drive/ don't participate)
- Transfer (transferring the risk; ie, insurance)
Categories of Risk Management Risk Control (avoidance & reduction)
Techniques
Risk Financing (retention & transfer)
https://quizlet.com/1126807116/fpqp-exam-study-set-exam-2026-exam-questions-answers-latest-already-graded-a-update-20252026-flash-cards/?new 4/40
