FPQP Final Exam Study Set
Comprehensive planning - answerA client is seeking guidance in all areas of financial
planning. Which of the following most closely describes the type of financial planning
the client wants?
Targeted financial planning - answerA planner who addresses only the purchase of a
first home for a client is practicing
Mental accounting - answerKiara has accumulated $10,000 in a savings account over
the last few years and has earmarked that money as a down payment on a luxury boat.
Her central air conditioner breaks and requires $5,000 in repairs. Kiara is reluctant to
spend the money in her savings account to make the repairs because she wants to use
that money for the boat down payment. Instead, she puts the $5,000 repair charge on
her credit card at an annual interest rate of 23%. This is an example of which of these
behaviors?
B) Definite - answerWhich of the following is a characteristic of properly stated financial
goals?
A) Broad
B) Definite
C) Flexible
D) General
D) offering suggestions for goals. - answerWhen helping clients identify goals, financial
planners should practice active listening skills by engaging in all of these except
A) summarizing what the planner has heard.
B) restating the clients' goals.
C) paraphrasing what the clients have said.
D) offering suggestions for goals.
B) To accumulate $40,000 in seven years for a down payment on a house -
answerWhich of the following financial goals is written correctly?
A) To invest $5,000 a year for retirement
B) To accumulate $40,000 in seven years for a down payment on a house
C) To set aside 10% of income to replace a car
D) To accumulate funds within the next 10 years for a child's college expenses
, Understanding the client's personal and financial circumstances - answerDuring what
step in the financial planning process is the current yield from already-invested assets
first identified?
Developing the financial planning recommendations - answerAsset categories that are
appropriate for the client are determined during which step of the financial planning
process?
Monitoring progress and updating - answerDuring which step of the financial planning
process is the performance of a client's investments reviewed periodically?
Analyzing the client's current course of action and potential alternate course(s) of action
- answerPotential problems that might interfere with clients achieving their objectives
are identified in which step in the financial planning process?
B) Health status - answerWhich of these would NOT be considered quantitative data?
A) Life insurance policies
B) Health status
C) Assets and liabilities
D) Brokerage firm statements
Insurance needs
Retirement income objectives
Acceptable investment strategies
Liquid assets available for emergencies - answerWhich of the following is something a
financial planner would want to know when creating a financial plan?
Insurance needs
Retirement income objectives
Acceptable investment strategies
Liquid assets available for emergencies
Presenting the financial planning recommendations - answerWhich of the seven steps
of the financial planning process follows the development of the financial planning
recommendations?
A fiduciary always puts the best interests of the client first. - answerWhat is the best
description of a fiduciary?
Three to six months of living expenses in liquid investments - answerIt is generally
recommended by planners that an emergency fund be established. Which of the
following guidelines is recommended?
Comprehensive planning - answerA client is seeking guidance in all areas of financial
planning. Which of the following most closely describes the type of financial planning
the client wants?
Targeted financial planning - answerA planner who addresses only the purchase of a
first home for a client is practicing
Mental accounting - answerKiara has accumulated $10,000 in a savings account over
the last few years and has earmarked that money as a down payment on a luxury boat.
Her central air conditioner breaks and requires $5,000 in repairs. Kiara is reluctant to
spend the money in her savings account to make the repairs because she wants to use
that money for the boat down payment. Instead, she puts the $5,000 repair charge on
her credit card at an annual interest rate of 23%. This is an example of which of these
behaviors?
B) Definite - answerWhich of the following is a characteristic of properly stated financial
goals?
A) Broad
B) Definite
C) Flexible
D) General
D) offering suggestions for goals. - answerWhen helping clients identify goals, financial
planners should practice active listening skills by engaging in all of these except
A) summarizing what the planner has heard.
B) restating the clients' goals.
C) paraphrasing what the clients have said.
D) offering suggestions for goals.
B) To accumulate $40,000 in seven years for a down payment on a house -
answerWhich of the following financial goals is written correctly?
A) To invest $5,000 a year for retirement
B) To accumulate $40,000 in seven years for a down payment on a house
C) To set aside 10% of income to replace a car
D) To accumulate funds within the next 10 years for a child's college expenses
, Understanding the client's personal and financial circumstances - answerDuring what
step in the financial planning process is the current yield from already-invested assets
first identified?
Developing the financial planning recommendations - answerAsset categories that are
appropriate for the client are determined during which step of the financial planning
process?
Monitoring progress and updating - answerDuring which step of the financial planning
process is the performance of a client's investments reviewed periodically?
Analyzing the client's current course of action and potential alternate course(s) of action
- answerPotential problems that might interfere with clients achieving their objectives
are identified in which step in the financial planning process?
B) Health status - answerWhich of these would NOT be considered quantitative data?
A) Life insurance policies
B) Health status
C) Assets and liabilities
D) Brokerage firm statements
Insurance needs
Retirement income objectives
Acceptable investment strategies
Liquid assets available for emergencies - answerWhich of the following is something a
financial planner would want to know when creating a financial plan?
Insurance needs
Retirement income objectives
Acceptable investment strategies
Liquid assets available for emergencies
Presenting the financial planning recommendations - answerWhich of the seven steps
of the financial planning process follows the development of the financial planning
recommendations?
A fiduciary always puts the best interests of the client first. - answerWhat is the best
description of a fiduciary?
Three to six months of living expenses in liquid investments - answerIt is generally
recommended by planners that an emergency fund be established. Which of the
following guidelines is recommended?
