CFP Exam Flash Cards with Correct and Updated Solutions 2022/2023

CFP Exam Flash Cards with Correct and Updated Solutions 2022/2023 Savings Strategy: How much of your gross income should you save? - CORRECT ANSWER 5-8% Securities Act of 1933 - CORRECT ANSWER Purchasers of new issues must be provided with a detailed prospectus before transaction. Securities Act of 1934 - CORRECT ANSWER Regulates the secondary Market or trading of issued securities. This act created the SEC Investment Company Act of 1940 - CORRECT ANSWER SEC can regulate UITs, Mutual funds, and variable life insurance/annuities. Securities investment Protection act of 1970 - CORRECT ANSWER Forms SIPC to securities firms that are in financial difficulties. SIPC insures investors against loses caused by the failure of the firm. What does Fiscal Policy include? - CORRECT ANSWER Expenditures, Taxation, and debt management What does Monetary Policy Include? - CORRECT ANSWER Reserve Requirements, Discount Rate, Open Market Operations I.E. Fed Buys/sells securities, Inc/Dec margin rates Reserve Requirement - CORRECT ANSWER Reserve money that the banks must maintain as a % of their total amount Discount Rate - CORRECT ANSWER Rate the Federal Reserve charges the member banks to borrow reserves Open market Operations - CORRECT ANSWER When the Fed either buys sells securities. Buy= expan economy and sell = contract the economy Margin - CORRECT ANSWER inc margin to lossen credit and dec. margin to tighten credit. Margin is the % of money you can use beyond what is currently invested. I.E. 50% margin with 100K invested means you can borrow an additional 50K on margin to invest QTP(Qualified Tuition Programs) - CORRECT ANSWER 529 plans that have tax free withdrawls