CRPC PRACTICE EXAM UPDATE ACTUAL EXAM QUESTIONS AND CORRECT COMPREHENSIVE DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+

CRPC PRACTICE EXAM 1 2025/2026 UPDATE ACTUAL EXAM QUESTIONS AND CORRECT COMPREHENSIVE DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED A+ Which of the following are correct statements about income replacement percentages? - Ans →II, III, & IV II IRP vary between low-income and high-income retirees III IR ratios should not be used as the only basis for planning IV IR ratios are useful for younger clients as a guide to their long-range planning and investing If Tom and Jenny want to save a fixed amount annually to accumulate $2 million by their retirement date in 25 years (rather than an amount that grows with inflation each year), what level annual end of year savings amount will they need to deposit each year, assuming their savings earn 7% annually? - Ans →"END" mode and "1 P/Yr". FV = 2,000,000 I/YR = 7 N = 25 PV = 0 then PMT = $31,621 Bill and Lisa Hahn have determined that they will need a monthly income of $6,000 during retirement. They expect to receive SS benefits amounting to $3,500 per month at the beginning of each month. Over the 12 remaining years of their preretirement period, they expect to generate an average annual after-tax investment return of 8%; during their 25-year retirement period, they want to assume a 6% annual after-tax investment return compounded monthly. They want to start their monthly retirement withdrawals on the first day they retire. What is the lump sum needed at the beginning of retirement to fund this income stream? - Ans →Monthly retirement income need is not specified as "today's dollars" and no inflation rate specified; therefore, it must be assumed that the $2,500 net monthly income need represents retirement dollars, and the retirement period income stream is level. To calculate the lump sum needed at the beginning of retirement, discount the stream of monthly income payments at the investment return rate: BEG mode and "12 P/Yr" PMT = 2,500 SHIFT N = 25 I/YR = 6 FV = 0 then PV = $389,957 Assume a client and investment professional have worked together for 7 years, Recently, the client's personal and financial circumstances have changed. According to the course materials, what is the next asset management step that the investment professional should take? - Ans →gather data Which one of the following is not a key attribute of an investment policy - Ans →fluid All of these are examples of asset allocation strategies except - Ans →alpha When determining what provides the most diversification - Ans →the further away from +1, the more diversification The two major risks associated with individual common stocks are - Ans →market risk and business risk Risks associated with bonds: - Ans →interest rate, default, purchasing power What is the price of a bond with a 7% coupon, a $1,000 par value, and a maturity of 20 years if the market interest rate for similar bonds is 6%? - Ans →Set the calculator for 2 P/Yr and END mode. FV = 1000 PMT = 35 20 SHIFT N I/YR = 6 and then PV = $1,115.57 35 is the semiannual payment of the bond. ($70/2) This year, your 63 year old client had $17,025 of earned income and $30,000 of investment income. He was also drawing SS benefits. Which one of the following correctly describes the impact on his SS benefits? - Ans →There is no reduction to his benefits. The client's earnings (earned income) are below the allowable limit for the current year ($19,560 for 2022). Remember that according to the work penalty rule, only earned income is counted toward the "allowable limit". Which one of the following is a correct statement about the amount of SS retirement benefits available when a fully insured worker's retirement benefit begins at full retirement age (FRA)? - Ans →If the spouse is at or above his or her full retirement age when commencing SS benefits, the spouse will receive at least 50% of the worker's PIA Which one of the following is correct regarding most types of tax exempt interest and taxation of Social Security benefits? - Ans →All of the tax-exempt interest is included in the computation of the taxation of SS benefits However, tax-free Roth distributions are not counted when determining provisional income. A maximum of 85% of the SS benefits are subject to taxation Susan has reached FRA. She is trying to decide between starting SS benefits of $1,000 per month now, or delaying receipt for 3 years and using her savings to provide current income. by delaying three years her benefit would increase to $1,240 per month. Ignoring the time value of money and COLAs, use the break-even calculation to determine how much longer Susan will need to live in order for delaying to "pay off". - Ans →She should delay only if she expects to live beyond the next 15 and a half years of so.