FPQP CERTIFICATION EVALUATION
VERIFIED QUESTIONS AND SOLUTIONS
FULL REVIEW PACK
●● fundamental areas of financial planning
Answer: cash management and use of debt
management of personal risk and insurance
investments
retirement planning
tax implications of financial planning
estate planning
●● FPQP standards of professional conduct
Answer: integrity
objectivity
competency
confidentiality
professionalism
●● Fiduciary Standard 5 responsibilities
Answer: 1. to put client's interests first
,2. to act with upmost good faith
.3. to provide full & adequate disclosure of all material facts
4. not to mislead clients
5. to expose all conflicts of interest
●● 3 basic financial statements
Answer: statement of financial planning
cash flow statement
budget (pro forma)
●● statement of financial position
Answer: STATIC - considers assets and liabilities at a certain point in
time and can determine net worth
●● Cash flow statement
Answer: records cash inflows and outflows over a period of time
●● net worth
Answer: assets minus liabilities
●● cash/cash equivalents
Answer: readily converted to cash without losing principal
,ex. checking/savings, CDs, money market funds, life insurnance cash
values
●● investment asset examples
Answer: stocks, bonds, mutual funds, etfs, Real estate, precious metals
●● Use asset examples
Answer: residence, automobiles, boats, etc.
●● Areas to Evalutate
Answer: emergency fund
level of debt
level of savings
diversification of assets
retirement prep
tax issues
●● PITI
Answer: principal, interest, taxes, insurance
●● Front end debt ratio
, Answer: 28% or less
●● back end debt ratio
Answer: 36% or less
●● non-mortgage debt ratio
Answer: 20% or less
●● 5 Cs of credit
Answer: character
capacity
capital
collateral
conditions
●● Fair and Accurate Credit Transactions Act
Answer: gives consumers the right to request a free copy of their credit
report every year.
●● Types of credit
Answer: Revolving and Installment
VERIFIED QUESTIONS AND SOLUTIONS
FULL REVIEW PACK
●● fundamental areas of financial planning
Answer: cash management and use of debt
management of personal risk and insurance
investments
retirement planning
tax implications of financial planning
estate planning
●● FPQP standards of professional conduct
Answer: integrity
objectivity
competency
confidentiality
professionalism
●● Fiduciary Standard 5 responsibilities
Answer: 1. to put client's interests first
,2. to act with upmost good faith
.3. to provide full & adequate disclosure of all material facts
4. not to mislead clients
5. to expose all conflicts of interest
●● 3 basic financial statements
Answer: statement of financial planning
cash flow statement
budget (pro forma)
●● statement of financial position
Answer: STATIC - considers assets and liabilities at a certain point in
time and can determine net worth
●● Cash flow statement
Answer: records cash inflows and outflows over a period of time
●● net worth
Answer: assets minus liabilities
●● cash/cash equivalents
Answer: readily converted to cash without losing principal
,ex. checking/savings, CDs, money market funds, life insurnance cash
values
●● investment asset examples
Answer: stocks, bonds, mutual funds, etfs, Real estate, precious metals
●● Use asset examples
Answer: residence, automobiles, boats, etc.
●● Areas to Evalutate
Answer: emergency fund
level of debt
level of savings
diversification of assets
retirement prep
tax issues
●● PITI
Answer: principal, interest, taxes, insurance
●● Front end debt ratio
, Answer: 28% or less
●● back end debt ratio
Answer: 36% or less
●● non-mortgage debt ratio
Answer: 20% or less
●● 5 Cs of credit
Answer: character
capacity
capital
collateral
conditions
●● Fair and Accurate Credit Transactions Act
Answer: gives consumers the right to request a free copy of their credit
report every year.
●● Types of credit
Answer: Revolving and Installment
