CFP FUNDAMENTALS FINAL |ACTUAL QUESTIONS
AND VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
All of the following statements are true, except? Why?
A
The American Opportunity credit is available for the first four years of a degree program or
certificate.
B
The American Opportunity credit does not include course materials.
C
The American Opportunity credit is awarded on a per student basis.
D
The Lifetime Learning credit is awarded on a per family basis.
CORRECT ANSWER
correct answer is B.
The American Opportunity credit now includes course materials.
American Opportunity is per student, lifetime is per family, (as is lifetime learning credit)
- except AOTC is only for the first for years of post secondary education (LLC is for an
unlimited amount of years)
Question 2
1
,The type of risk which measures the extent to which a firm uses debt securities and other
forms of debt in its capital structure to finance is known as:
Business risk
Systematic risk
Default risk
Financial risk
CORRECT ANSWER
The correct answer is D.
Financial risk has to do with the amount of leveraging or use of borrowed funds a firm
utilizes to structure its investment and finance its assets.
Question 3
Bob, a CFP® professional, was in a hurry to go out of the country on a 3 week family
vacation. Bob, let his junior partner, who recently passed the CFP® exam, and has 2 years
of financial planning experience, prepare and present a financial plan to a new client.
Which of the following Code of Ethics and Standards of Conduct did Bob violate, if any?
None, as the junior partner passed the CFP exam.
Duties Owed to Clients
Duties Owed to CFP® Board
Duties to Firms or Subordinates
CORRECT ANSWER
The correct answer is D.
Bob must use Reasonable Care When Supervising A CFP® professional and must exercise
reasonable care when supervising persons acting under the CFP® professional's direction,
including employees and other persons over whom the CFP® professional has
responsibility, with a view toward preventing violations of applicable laws, rules,
regulations, and these Standards.
2
,Question 4
Robert Smith asks for your help in preparing his cash flow statement. He tells you that his
salary before taxes is $250,000 and that he has NO mortgage on his home. Which of the
following statements is true about Robert's cash flow statement?
The value of the home would be an income source, since there is NO mortgage.
The value of the home would be an asset.
The taxes on his salary would be a liability.
The taxes on his salary would be an expense.
CORRECT ANSWER
The correct answer is D.
Option "A" - Home equity would not provide a source of income. Option "B" - The value
of the home is an asset, but this has nothing to do with cash flow statements. Option "C"
- Taxes on his salary are an expense. Liabilities are shown on the state of financial
position, not the cash flow statement.
Question 5
When providing financial planning services to a client, everything must be disclosed in
writing, EXCEPT:
Material conflicts of interest that may impact the CFP® professional's ability to provide
impartial advice.
The process of maintaining client confidentiality.
How the client pays for products, services and additional incurred costs including surrender
charges and sales loads.
Disclosure of Economic Benefit for Referral or Engagement of Additional Persons.
CORRECT ANSWER
3
, The correct answer is A.
Material conflicts of interest may be discussed orally or in writing. B, C & D must be in
writing when providing financial planning to a client (Duties owed to a client 10, Provide
Information to a Client).
Question 6
The primary difference between open end and closed end investment companies is:
Closed end funds always sell at par value.
Open end funds do not charge sales fees.
Closed end funds guarantee the Net Asset Value (NAV) at the time of sale or purchase.
Closed end funds sell only a limited number of shares.
CORRECT ANSWER
D
Question 7
The type of risk which CANNOT be eliminated through diversification is:
Unsystematic Risk.
Company Specific Risk.
Systematic Risk.
Business Risk.
CORRECT ANSWER
The correct answer is C.
4
AND VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
All of the following statements are true, except? Why?
A
The American Opportunity credit is available for the first four years of a degree program or
certificate.
B
The American Opportunity credit does not include course materials.
C
The American Opportunity credit is awarded on a per student basis.
D
The Lifetime Learning credit is awarded on a per family basis.
CORRECT ANSWER
correct answer is B.
The American Opportunity credit now includes course materials.
American Opportunity is per student, lifetime is per family, (as is lifetime learning credit)
- except AOTC is only for the first for years of post secondary education (LLC is for an
unlimited amount of years)
Question 2
1
,The type of risk which measures the extent to which a firm uses debt securities and other
forms of debt in its capital structure to finance is known as:
Business risk
Systematic risk
Default risk
Financial risk
CORRECT ANSWER
The correct answer is D.
Financial risk has to do with the amount of leveraging or use of borrowed funds a firm
utilizes to structure its investment and finance its assets.
Question 3
Bob, a CFP® professional, was in a hurry to go out of the country on a 3 week family
vacation. Bob, let his junior partner, who recently passed the CFP® exam, and has 2 years
of financial planning experience, prepare and present a financial plan to a new client.
Which of the following Code of Ethics and Standards of Conduct did Bob violate, if any?
None, as the junior partner passed the CFP exam.
Duties Owed to Clients
Duties Owed to CFP® Board
Duties to Firms or Subordinates
CORRECT ANSWER
The correct answer is D.
Bob must use Reasonable Care When Supervising A CFP® professional and must exercise
reasonable care when supervising persons acting under the CFP® professional's direction,
including employees and other persons over whom the CFP® professional has
responsibility, with a view toward preventing violations of applicable laws, rules,
regulations, and these Standards.
2
,Question 4
Robert Smith asks for your help in preparing his cash flow statement. He tells you that his
salary before taxes is $250,000 and that he has NO mortgage on his home. Which of the
following statements is true about Robert's cash flow statement?
The value of the home would be an income source, since there is NO mortgage.
The value of the home would be an asset.
The taxes on his salary would be a liability.
The taxes on his salary would be an expense.
CORRECT ANSWER
The correct answer is D.
Option "A" - Home equity would not provide a source of income. Option "B" - The value
of the home is an asset, but this has nothing to do with cash flow statements. Option "C"
- Taxes on his salary are an expense. Liabilities are shown on the state of financial
position, not the cash flow statement.
Question 5
When providing financial planning services to a client, everything must be disclosed in
writing, EXCEPT:
Material conflicts of interest that may impact the CFP® professional's ability to provide
impartial advice.
The process of maintaining client confidentiality.
How the client pays for products, services and additional incurred costs including surrender
charges and sales loads.
Disclosure of Economic Benefit for Referral or Engagement of Additional Persons.
CORRECT ANSWER
3
, The correct answer is A.
Material conflicts of interest may be discussed orally or in writing. B, C & D must be in
writing when providing financial planning to a client (Duties owed to a client 10, Provide
Information to a Client).
Question 6
The primary difference between open end and closed end investment companies is:
Closed end funds always sell at par value.
Open end funds do not charge sales fees.
Closed end funds guarantee the Net Asset Value (NAV) at the time of sale or purchase.
Closed end funds sell only a limited number of shares.
CORRECT ANSWER
D
Question 7
The type of risk which CANNOT be eliminated through diversification is:
Unsystematic Risk.
Company Specific Risk.
Systematic Risk.
Business Risk.
CORRECT ANSWER
The correct answer is C.
4
