CFP Exam questions with correct answers

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