FPQP EXAM WITH VERIFIED
QUESTIONS AND ANSWERS
Comprehensive Financial Plan - correct answer-covers almost all aspects of a
personal's financial situation (including risk mamagenet, investment planning, tax,
retirement, and estate planning) Targeted Financial Plan - correct answer-focus on a
segment of individual's objectives. (ex - first home, elderly care, reducing tax burden)
Goals should be... - correct answer-defined or definite Steps to setting financial goal -
correct answer-1. Purpose, 2. Timeframe, 3. Amount ("PTA") Personal financial
planning is continuous or noncontinuous? - correct answer-Continuous 7 Steps of
Financial Planning Process: - correct answer-1. Understanding client's personal and
financial circumstances. 2. Identifying and selecting goals. 3. Analyzing the client's
current course of action and potential alternatre course(s). 4. Devleoping the
financial planning recommendations. 5. Presenting the financial planning
recommendations. 6. Implementing the financial planning recommendations. 7.
Monitoring process and updating. Two types of information: (Step 1 - Understanding
client's personal and financial circumstances) - correct answer-1. Quantitative -
"names and numbers" family profile, assets and liability, cash inflows/outflaws,
insurance policy info, employee/pension plan, tax returns, retirement benefits 2.
Qualititative - "lifestyle info" goals/objectives, health status, interests/hobbies, risk-
tolerance level, changes in lifestyle, estate planning issues, money values, family
relationships, planning assumptions "SWOT" Approach (Step 3 - analyze and
, evaluate) - correct answer-SWOT = Strenghs, Weaknesses, Opportunities, Threats
Existing conditions are reviewed to identify strengths and weakenesses in client's
total current financial situation. Identifying existing or potential problems that could
impact the client's ability to achieve objectives. Emergency fund should be how
much? - correct answer-3-6 months expenses in emergency fund. Developing a plan
means... (Step 4 - Reccommdations) - correct answer-the planner determines the
appropriate asset categories for the client's objective, time horizon, etc. What duty is
required of a financial planner? - correct answer-Fiduciary Duty = keep client's best
interest over your's or your firm's. Cash Flow Statement - correct answer-A cash flow
statement summarizes actual cash receipts and cash disbusements for a specified
period of time. Records inflows and outflows over a period of time. (Inflows =
income, salary, investments Outlfows = loan payments, utility payments) +/- cash
flow likely affects an individual's net worth. 3 Asset categories - correct answer-1.
Cash/Cash equivalents 2. Invested assets 3. Use assets Examples: Cash/Cash eq. =
checking account, credit union savings account. Invested = stock portfolio, IRA, 401k
Use = Home, automobile, personal property Assets are shown at ... ? - correct
answer-Fair Market Value Net Worth - correct answer-Is the difference between
assets and liabilities. Areas most often bulk of individual's net worth is in home
equity, personal property, and/or retirement benefits. Fixed Outflows - correct
answer-Predictable and reoccurring. (Indviduals have little to no conrol over fixed
outflow amounts). Examples: Housing (rent or mortgage) Insurance payments Auto
notes Loan payments Court ordered support/alimony Taxes Variable Outflows -
correct answer-Examples: Medicial expenses Food/personal care Child care
Contributions to retirement Housing costs (utlities, maintenance) Vacations
QUESTIONS AND ANSWERS
Comprehensive Financial Plan - correct answer-covers almost all aspects of a
personal's financial situation (including risk mamagenet, investment planning, tax,
retirement, and estate planning) Targeted Financial Plan - correct answer-focus on a
segment of individual's objectives. (ex - first home, elderly care, reducing tax burden)
Goals should be... - correct answer-defined or definite Steps to setting financial goal -
correct answer-1. Purpose, 2. Timeframe, 3. Amount ("PTA") Personal financial
planning is continuous or noncontinuous? - correct answer-Continuous 7 Steps of
Financial Planning Process: - correct answer-1. Understanding client's personal and
financial circumstances. 2. Identifying and selecting goals. 3. Analyzing the client's
current course of action and potential alternatre course(s). 4. Devleoping the
financial planning recommendations. 5. Presenting the financial planning
recommendations. 6. Implementing the financial planning recommendations. 7.
Monitoring process and updating. Two types of information: (Step 1 - Understanding
client's personal and financial circumstances) - correct answer-1. Quantitative -
"names and numbers" family profile, assets and liability, cash inflows/outflaws,
insurance policy info, employee/pension plan, tax returns, retirement benefits 2.
Qualititative - "lifestyle info" goals/objectives, health status, interests/hobbies, risk-
tolerance level, changes in lifestyle, estate planning issues, money values, family
relationships, planning assumptions "SWOT" Approach (Step 3 - analyze and
, evaluate) - correct answer-SWOT = Strenghs, Weaknesses, Opportunities, Threats
Existing conditions are reviewed to identify strengths and weakenesses in client's
total current financial situation. Identifying existing or potential problems that could
impact the client's ability to achieve objectives. Emergency fund should be how
much? - correct answer-3-6 months expenses in emergency fund. Developing a plan
means... (Step 4 - Reccommdations) - correct answer-the planner determines the
appropriate asset categories for the client's objective, time horizon, etc. What duty is
required of a financial planner? - correct answer-Fiduciary Duty = keep client's best
interest over your's or your firm's. Cash Flow Statement - correct answer-A cash flow
statement summarizes actual cash receipts and cash disbusements for a specified
period of time. Records inflows and outflows over a period of time. (Inflows =
income, salary, investments Outlfows = loan payments, utility payments) +/- cash
flow likely affects an individual's net worth. 3 Asset categories - correct answer-1.
Cash/Cash equivalents 2. Invested assets 3. Use assets Examples: Cash/Cash eq. =
checking account, credit union savings account. Invested = stock portfolio, IRA, 401k
Use = Home, automobile, personal property Assets are shown at ... ? - correct
answer-Fair Market Value Net Worth - correct answer-Is the difference between
assets and liabilities. Areas most often bulk of individual's net worth is in home
equity, personal property, and/or retirement benefits. Fixed Outflows - correct
answer-Predictable and reoccurring. (Indviduals have little to no conrol over fixed
outflow amounts). Examples: Housing (rent or mortgage) Insurance payments Auto
notes Loan payments Court ordered support/alimony Taxes Variable Outflows -
correct answer-Examples: Medicial expenses Food/personal care Child care
Contributions to retirement Housing costs (utlities, maintenance) Vacations
