Capstone 50 Test Review Questions Well
Solved
A planner observes the following about the client: age 65, knowledgeable about investments, retiring in
2 years, perfect health, financially secure and would like to invest for his grandchildren who are 2 and 5
years old. Which of the following may be the best asset allocation for the clients needs? - ✔ ✔
Aggressive growth (80% stocks; 20% bonds)
A professional suspension includes the suspension or bar as a disciplinary measure for which of the
following professional licenses? Click all that apply. - ✔ ✔ All
A registered investment adviser is required to keep records concerning all the following, EXCEPT: - ✔
✔ Profits made by clients based on the adviser's recommendations
All of the following statements concerning a Statement of Financial Position are correct, EXCEPT: - ✔
✔ A car would be classified as a cash or cash equivalent if a care dealer said it could be readily
converted into cash.
All of the following statements concerning budgeting are correct, EXCEPT: - ✔ ✔ Budgeting and cash
flow management consist of forecasting income and expenses.
All the following are items that would appear in a family's cash flow statement, EXCEPT: - ✔ ✔ Total
assets.
An asset allocation strategy that is used to derive long-run asset allocation weights that are not changed
when capital market conditions experience temporary changes is known as: - ✔ ✔ Strategic asset
allocation
Assume that $2,500 is invested for the next eleven years to earn an annual compound return of 9.25%.
What will the account be at the end of the investment period? - ✔ ✔ $6,615.70
Assume that as of December 31, 20XX, the Schmidt family has total cash and cash equivalents equal to
$20,000, mutual fund shares equal to $30,000, a residence valued at $130,000, and a car and other
personal property valued at $80,000. If the family's net worth is $180,000, what is the amount of the
family's liabilities? - ✔ ✔ $80,000
At what phase do you need to plan for disability insurance? - ✔ ✔ Young Adult phase (18-25)
Candidate Fitness Standards ensure that an individual's conduct does not adversely impact on his or her
candidacy for CFP® certification. Which of the following conduct is deemed unacceptable and will always
bar certification? - ✔ ✔ 2,4
, CFP Board Counsel determines if there is probable cause to believe grounds for discipline exists. Which
of the following actions may CFP Board Counsel take? Click all that apply. - ✔ ✔ 1,2,4
CFP Board's Rules of Conduct are binding on which of the following groups?
(I) CFP® certificants who are actively involved in the practice of personal financial planning.
(II) CFP® certificants who have "fee-only" financial planning practices.
(III) CFP® certificants who work in government or education. - ✔ ✔ (I), (II) and (III)
Financial Planning for a terminally ill client may involve some of the following options, EXCEPT: - ✔ ✔
Obtaining death benefits from an insurance company through a transfer for value exchange.
How can excessive debt be avoided? Click all that apply. - ✔ ✔ 1, 3
If a mortgage lender charges 3 "points" to the purchaser of a home with a $110,000 mortgage, what is
the cost of these "points"? - ✔ ✔ $3,300.00
In which life cycle phase are you in your peak earning years and need to plan for tax considerations? - ✔
✔ Family Maturity (50-60)
In which life cycle phase do you need to trim your estate tax bill? - ✔ ✔ Retirement (60-?)
Larry plans to begin saving for his children's education by depositing $2,000 today in a savings account.
He plans to increase his annual deposits by 10% each year beginning one year from now. He will make a
total of six deposits, including the initial $2,000. If his account earns 6% interest per year, approximately
how much will be in the account at the end of six years? - ✔ ✔ $18,700
Maude and Claude Tripp would like to give Maude's parents a fiftieth wedding anniversary gift of
$50,000 seven years from now. If the Tripps could earn an annual interest rate of 9.84%, compounded
monthly, how much should they deposit today to accumulate the anniversary gift of $50,000? - ✔ ✔
$25,179.54
One step in the financial planning process is to determine the clients financial status. Which of the
following tasks are completed during this process?
(I) Calculate the clients net worth.
(II) Select appropriate investment options.
(III) Prepare a cash flow statement.
Solved
A planner observes the following about the client: age 65, knowledgeable about investments, retiring in
2 years, perfect health, financially secure and would like to invest for his grandchildren who are 2 and 5
years old. Which of the following may be the best asset allocation for the clients needs? - ✔ ✔
Aggressive growth (80% stocks; 20% bonds)
A professional suspension includes the suspension or bar as a disciplinary measure for which of the
following professional licenses? Click all that apply. - ✔ ✔ All
A registered investment adviser is required to keep records concerning all the following, EXCEPT: - ✔
✔ Profits made by clients based on the adviser's recommendations
All of the following statements concerning a Statement of Financial Position are correct, EXCEPT: - ✔
✔ A car would be classified as a cash or cash equivalent if a care dealer said it could be readily
converted into cash.
All of the following statements concerning budgeting are correct, EXCEPT: - ✔ ✔ Budgeting and cash
flow management consist of forecasting income and expenses.
All the following are items that would appear in a family's cash flow statement, EXCEPT: - ✔ ✔ Total
assets.
An asset allocation strategy that is used to derive long-run asset allocation weights that are not changed
when capital market conditions experience temporary changes is known as: - ✔ ✔ Strategic asset
allocation
Assume that $2,500 is invested for the next eleven years to earn an annual compound return of 9.25%.
What will the account be at the end of the investment period? - ✔ ✔ $6,615.70
Assume that as of December 31, 20XX, the Schmidt family has total cash and cash equivalents equal to
$20,000, mutual fund shares equal to $30,000, a residence valued at $130,000, and a car and other
personal property valued at $80,000. If the family's net worth is $180,000, what is the amount of the
family's liabilities? - ✔ ✔ $80,000
At what phase do you need to plan for disability insurance? - ✔ ✔ Young Adult phase (18-25)
Candidate Fitness Standards ensure that an individual's conduct does not adversely impact on his or her
candidacy for CFP® certification. Which of the following conduct is deemed unacceptable and will always
bar certification? - ✔ ✔ 2,4
, CFP Board Counsel determines if there is probable cause to believe grounds for discipline exists. Which
of the following actions may CFP Board Counsel take? Click all that apply. - ✔ ✔ 1,2,4
CFP Board's Rules of Conduct are binding on which of the following groups?
(I) CFP® certificants who are actively involved in the practice of personal financial planning.
(II) CFP® certificants who have "fee-only" financial planning practices.
(III) CFP® certificants who work in government or education. - ✔ ✔ (I), (II) and (III)
Financial Planning for a terminally ill client may involve some of the following options, EXCEPT: - ✔ ✔
Obtaining death benefits from an insurance company through a transfer for value exchange.
How can excessive debt be avoided? Click all that apply. - ✔ ✔ 1, 3
If a mortgage lender charges 3 "points" to the purchaser of a home with a $110,000 mortgage, what is
the cost of these "points"? - ✔ ✔ $3,300.00
In which life cycle phase are you in your peak earning years and need to plan for tax considerations? - ✔
✔ Family Maturity (50-60)
In which life cycle phase do you need to trim your estate tax bill? - ✔ ✔ Retirement (60-?)
Larry plans to begin saving for his children's education by depositing $2,000 today in a savings account.
He plans to increase his annual deposits by 10% each year beginning one year from now. He will make a
total of six deposits, including the initial $2,000. If his account earns 6% interest per year, approximately
how much will be in the account at the end of six years? - ✔ ✔ $18,700
Maude and Claude Tripp would like to give Maude's parents a fiftieth wedding anniversary gift of
$50,000 seven years from now. If the Tripps could earn an annual interest rate of 9.84%, compounded
monthly, how much should they deposit today to accumulate the anniversary gift of $50,000? - ✔ ✔
$25,179.54
One step in the financial planning process is to determine the clients financial status. Which of the
following tasks are completed during this process?
(I) Calculate the clients net worth.
(II) Select appropriate investment options.
(III) Prepare a cash flow statement.
