Certified Financial Planner Practice Exam 1: Realistic Q&A for 2025–2026 About This Practice Exam:

Certified Financial Planner Practice Exam 1: Realistic Q&A for 2025–2026 About This Practice Exam: This CFP Practice Exam 1 includes a full-length set of realistic, CFP Board-style questions covering all 8 key domains: Financial Planning, Insurance, Tax, Investments, Retirement, Estate, Ethics, and Education Planning. Designed to mirror the format, structure, and difficulty of the actual CFP exam, this resource includes detailed answer explanations to reinforce learning and boost your confidence. A CFP professional is meeting with a client today to present a financial plan. Due to his substantial wealth, the client feels that there is little that he cannot achieve. However, the planning process has revealed certain goals to be unrealistic. In which stage of the financial planning process are unrealistic goals addressed? - -Section 2: Identifying and selecting goals A client couple, both 59 years of age, has requested a CFP professional's recommendation regarding long term care insurance. One spouse is in excellent health and the other is in fair health. They are both currently employed, have a surplus of cash flow, and have investable assets of $350K. The CFP professional should recommend that the couple: A. wait until 65 and Medicare eligibility to apply for coverage on both B. apply for coverage on both now C. apply for coverage on the healthier partner now D. Begin funding an investment account in lieu of insurance - -B. Apply for coverage on both now Best recommendation given the couple's age, as well as their assets, it is recommended that they both purchase long term care insurance. A client has a fully amortizing 15 year mortgage of $50,000 at 7% interest. Which of the following is the approximate amount of interest the client will pay over the mortgage term, based on equal monthly payments over the term of the loan? - -Answer: $30,895 Calculation N: 180 (15 years X 12 months) I: 7/12 (7% Interest rate / 12 payments) PV: -$50K PMT: $449.41 $449.41 X 180= $80,893.80 is the amount of total payments including principal + interest MINUS $50K loan = $30,895 A client is evaluating a group disability contract verses an individual disability contract. There are only 5 people in the group applying for this coverage. Which of the following would most likely be the major benefit of the group disability policy over the individual disability contract? a. Inclusion of part time employees b. Enhanced benefit triggers c. Lower premium on the policy d. more liberal definition of disability. - -C. Lower premium on the policy Insurance companies can more easily underwrite multiple lives for a single employer and can send a single premium notice. These cost savings are passed through in order to make small group coverage more attractive to purchase. A client owns a condominium and has a standard HO-6 Policy. A recent windstorm caused $2,000 of damage to the roof of the condominium. What amount might be recovered from the policy? A. $0 B. $1,000 C. $1,600 D. $2,000 - -A. $0 The damage to the roof of the condominium building will not be covered by an individual unit owner's HO-6 policy. the master building policy purchased by the homeowner's association covers all common elements of ownership. A client plans to set aside an equal amount at the end of each month for the next 25 years as a retirement fund. The client's life expectancy after retirement is 20 years and the client can earn 10% per year on any funds invested before or after retirement. The capital need at the client's retirement age has been calculated to be $2,129,390. How much must the client set aside to fund this amount rounded to the nearest dollar? - -$1,604