CRPC Questions with verified answers
1. The percentage change in price with a 1.5% rise in the market rate of interest
for a bond with a duration of 5.0 years is Ans✓✓✓ duration x change in mkt int
rate
1.5 x 5= -7.5
10 essential health benefits that must be covered by all health insurance policies
under PPACA Ans✓✓✓ 1. out patient care
2. emergency services
3. hospitalization
4. maternity and newborn care
5. mental health and addiction treatment
6. prescription drugs
7. rehab services and devices
8. lab services
9. preventive services
10. pediatric service
10 factors that must be considered before annuity purchase reco Ans✓✓✓ 1) age
2) annual income
3) financial situation, experience, and objectives
4) intended use of annuity
5) financial horizon
6) existing assets (investments and insurance)
,7) liquidity need
8) current liquid net worth
9) risk tolerance
10) tax status
10. Carla is collecting $600 per month from a government pension and is also
receiving a Social Security spousal benefit of $500 per month. Due to the GPO, her
Social Security spousal benefit will be reduced to ____________. Ans✓✓✓ Due
to the GPO, her Social Security spousal benefit will be reduced by 2/3, or $400.
$500 - $400 = $100.
10. Carla is collecting $600 per month from a government pension and is also
receiving a Social Security spousal benefit of $500 per month. Due to the GPO, her
Social Security spousal benefit will be reduced to ____________. Ans✓✓✓ Due
to the GPO, her Social Security spousal benefit will be reduced by 2/3, or $400.
$500 - $400 = $100.
11. David began receiving Social Security benefits in June 2015. He later learned
that he should have delayed receipt of his benefits until a later age. He has until
_______ to pay back all payments and refile for increase benefits at a future date.
Ans✓✓✓ Claimants have 12 months from the date they filed their original claim
to pay back all payments, and they can then refile for increased benefits at a later
date.
11. David began receiving Social Security benefits in June 2015. He later learned
that he should have delayed receipt of his benefits until a later age. He has until
_______ to pay back all payments and refile for increase benefits at a future date.
Ans✓✓✓ june 2016
,Claimants have 12 months from the date they filed their original claim to pay back
all payments, and they can then refile for increased benefits at a later date.
12. Which one of the following generally represents the basis of stock acquired by
gift, if the fair market value on the date of gift is less than the donor's basis?
Ans✓✓✓ This is generally a correct description of the basis in the hands of the
donee. The basis of stock acquired by gift will be the fair market value on the date
of the gift, unless the donor's basis is less than this fair market value and vice
versa.
***Lesser of donor's basis or FMV at date of gift
20. On average, Social Security represents ______ of the income of the elderly.
Ans✓✓✓ 38%
21. Tom, 59, is a widower and is receiving a widower's benefit on his deceased
spouse's record. Tom is considering getting remarried. As a planner, you should
suggest which one of the following? Ans✓✓✓ wait until 60 to remarry
If you remarry before the age of 60, your widower's benefit will be terminated. If
you are over the age of 60 when you remarry, your marriage will not affect your
Social Security widower's benefit.
24. Periodic distributions from a qualified plan that take place over _____ years
may not be rolled over into an IRA. Ans✓✓✓ 10
24. Periodic distributions from a qualified plan that take place over _____ years
may not be rolled over into an IRA. Ans✓✓✓ Periodic distributions from a
qualified plan that take place over nine years may be rolled over into an IRA.
, However, periodic distributions from a qualified plan that take place over a period
of 10 years or more cannot be rolled over into an IRA.
25. Sam, age 62, begins receiving his Social Security income. His PIA is $1,500 per
month. Because he has filed at age 62, his payment will be reduced by 25% to
$1,125. His wife Linda, age 67, would like to begin spousal benefits. Her monthly
income would be Ans✓✓✓ Because Linda has attained FRA, she would be eligible
for 50% of Sam's PIA, or $750.
25. The distribution strategy that strives to mitigate sequence of returns risk by
segmenting a portfolio according to when the funds will be needed is referred to
as Ans✓✓✓ the bucket strategy
26. How are Social Security benefits funded? Ans✓✓✓ Social Security and FICA
taxes are withheld by the employer. The total is 15.3% of payroll in 2016; the
employer pays 7.65% and the employee pays 7.65%. Benefits are not paid by
income taxes, and there is no trust fund. Monies are deposited into the general
account, and benefits are paid out of the general account.
27. It is January 15, 2016. Janet is a successful architect and her spouse, Tom, has
always worked as a part-time barista. Janet and Tom, both age 66, want to
maximize their Social Security benefits by using the file and suspend strategy. You
should advise them that Ans✓✓✓ The spouse who wants to file and suspend,
typically the higher wage earner, must be 66 before May 2016 and must file and
then suspend their benefits before the April 30, 2016, deadline. Effective May 1,
2016, this option will no longer be available, although those who were already
employing this strategy will be grandfathered in and don't need to refile.
27. Under value investing, if an investor desired to increase his or her investment
by $1,000 per month and the asset value had declined by $250 from the previous
1. The percentage change in price with a 1.5% rise in the market rate of interest
for a bond with a duration of 5.0 years is Ans✓✓✓ duration x change in mkt int
rate
1.5 x 5= -7.5
10 essential health benefits that must be covered by all health insurance policies
under PPACA Ans✓✓✓ 1. out patient care
2. emergency services
3. hospitalization
4. maternity and newborn care
5. mental health and addiction treatment
6. prescription drugs
7. rehab services and devices
8. lab services
9. preventive services
10. pediatric service
10 factors that must be considered before annuity purchase reco Ans✓✓✓ 1) age
2) annual income
3) financial situation, experience, and objectives
4) intended use of annuity
5) financial horizon
6) existing assets (investments and insurance)
,7) liquidity need
8) current liquid net worth
9) risk tolerance
10) tax status
10. Carla is collecting $600 per month from a government pension and is also
receiving a Social Security spousal benefit of $500 per month. Due to the GPO, her
Social Security spousal benefit will be reduced to ____________. Ans✓✓✓ Due
to the GPO, her Social Security spousal benefit will be reduced by 2/3, or $400.
$500 - $400 = $100.
10. Carla is collecting $600 per month from a government pension and is also
receiving a Social Security spousal benefit of $500 per month. Due to the GPO, her
Social Security spousal benefit will be reduced to ____________. Ans✓✓✓ Due
to the GPO, her Social Security spousal benefit will be reduced by 2/3, or $400.
$500 - $400 = $100.
11. David began receiving Social Security benefits in June 2015. He later learned
that he should have delayed receipt of his benefits until a later age. He has until
_______ to pay back all payments and refile for increase benefits at a future date.
Ans✓✓✓ Claimants have 12 months from the date they filed their original claim
to pay back all payments, and they can then refile for increased benefits at a later
date.
11. David began receiving Social Security benefits in June 2015. He later learned
that he should have delayed receipt of his benefits until a later age. He has until
_______ to pay back all payments and refile for increase benefits at a future date.
Ans✓✓✓ june 2016
,Claimants have 12 months from the date they filed their original claim to pay back
all payments, and they can then refile for increased benefits at a later date.
12. Which one of the following generally represents the basis of stock acquired by
gift, if the fair market value on the date of gift is less than the donor's basis?
Ans✓✓✓ This is generally a correct description of the basis in the hands of the
donee. The basis of stock acquired by gift will be the fair market value on the date
of the gift, unless the donor's basis is less than this fair market value and vice
versa.
***Lesser of donor's basis or FMV at date of gift
20. On average, Social Security represents ______ of the income of the elderly.
Ans✓✓✓ 38%
21. Tom, 59, is a widower and is receiving a widower's benefit on his deceased
spouse's record. Tom is considering getting remarried. As a planner, you should
suggest which one of the following? Ans✓✓✓ wait until 60 to remarry
If you remarry before the age of 60, your widower's benefit will be terminated. If
you are over the age of 60 when you remarry, your marriage will not affect your
Social Security widower's benefit.
24. Periodic distributions from a qualified plan that take place over _____ years
may not be rolled over into an IRA. Ans✓✓✓ 10
24. Periodic distributions from a qualified plan that take place over _____ years
may not be rolled over into an IRA. Ans✓✓✓ Periodic distributions from a
qualified plan that take place over nine years may be rolled over into an IRA.
, However, periodic distributions from a qualified plan that take place over a period
of 10 years or more cannot be rolled over into an IRA.
25. Sam, age 62, begins receiving his Social Security income. His PIA is $1,500 per
month. Because he has filed at age 62, his payment will be reduced by 25% to
$1,125. His wife Linda, age 67, would like to begin spousal benefits. Her monthly
income would be Ans✓✓✓ Because Linda has attained FRA, she would be eligible
for 50% of Sam's PIA, or $750.
25. The distribution strategy that strives to mitigate sequence of returns risk by
segmenting a portfolio according to when the funds will be needed is referred to
as Ans✓✓✓ the bucket strategy
26. How are Social Security benefits funded? Ans✓✓✓ Social Security and FICA
taxes are withheld by the employer. The total is 15.3% of payroll in 2016; the
employer pays 7.65% and the employee pays 7.65%. Benefits are not paid by
income taxes, and there is no trust fund. Monies are deposited into the general
account, and benefits are paid out of the general account.
27. It is January 15, 2016. Janet is a successful architect and her spouse, Tom, has
always worked as a part-time barista. Janet and Tom, both age 66, want to
maximize their Social Security benefits by using the file and suspend strategy. You
should advise them that Ans✓✓✓ The spouse who wants to file and suspend,
typically the higher wage earner, must be 66 before May 2016 and must file and
then suspend their benefits before the April 30, 2016, deadline. Effective May 1,
2016, this option will no longer be available, although those who were already
employing this strategy will be grandfathered in and don't need to refile.
27. Under value investing, if an investor desired to increase his or her investment
by $1,000 per month and the asset value had declined by $250 from the previous
