CRPC FINAL EXAM QUESTIONS WITH DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) |LATEST VERSION |ALREADY GRADED A+
1) A worker's primary insurance amount (PIA) is the amount they receive from Social Security -
ANSWER if he or she began payments at full retirement age.
2) For a worker whose full retirement age is 66 or later, the annual delayed retirement credit
percentage for the years you delay receipt of benefits beyond (FRA) is - ANSWER 8
3) The provision that certain mutual fund policies cannot be changed without shareholder approval
is addressed in the - ANSWER Investment Company Act of 1940.
4) A major responsibility of FINRA is - ANSWER developing rules and regulations for its members.
5) The recent regulatory and industry developments regarding fiduciary advice will most likely -
ANSWER increase client expectations of advisers and put downward pressure on fees.
6) Which act repealed a prohibition that had been in place preventing financial institutions from
offering a combination of commercial banking, investment banking, and insurance services? -
ANSWER Gramm-Leach-Bliley Act of 1999
7) The Employee Retirement Income Security Act (ERISA) was primarily passed because of concern
regarding the integrity and safety of - ANSWER employer-sponsored retirement plans.
8) An investment professional who reads investment journals is complying with the - ANSWER duty
to keep current.
9) You sell your client a GNMA based on your explanation that they are "safe" because they are
guaranteed by the U.S. government. In which one of the following ethical duties may you have
failed your customer? - ANSWER Duty to disclose
,10) Confidentiality is an important ethical obligation for all those who render investment advice. The
CFP Board, however, allows the unauthorized disclosure of confidential client information in -
ANSWER connection with a civil dispute between a CFP certificant and a client.
11) A potential client, Ross, is contacted by Amy, an investment professional with a fiduciary
responsibility to her clients. Ross is interested in trading complex options and is willing to open
an account if Amy is knowledgeable about options. Amy implies to Ross that she is an expert in
option trading but, in fact, knows only the basic elements of it. Looking solely at Amy's lack of
competency in this area, which fiduciary duty has not been met? - ANSWER Duty of care
12) The fundamental duty of a fiduciary adviser is to look out for the client's best interest. Which
fiduciary duty is most directly tied to making sure all actions are being made solely for the
benefit of the client? - ANSWER Duty of loyalty
13) The "suitability rule" is one of the key rules of the - ANSWER FINRA Conduct Rules.
14) Which one of the following statements comparing the suitability standard and the fiduciary
standard is correct? - ANSWER Verbal disclosure may be adequate under the suitability standard
but not the fiduciary standard.
15) In 2010 Dodd Frank tasked the SEC to study the feasibility of drafting a harmonized fiduciary
standard for both investment advisers and broker-dealers. In April 2018 the SEC proposed -
ANSWER continuing both a suitability standard for brokers and a fiduciary standard for advisers.
16) Delaying receipt of benefits (for example until age 70) will result in all of the following except -
ANSWER permanently reduced benefit amount.
17) Ann has reached her full retirement age (FRA) of 66 in 2020. She can elect to receive $1,000
now, or delay receipt by two years. She expects to live until age 90. Ignoring outside factors,
when should she begin her benefits? - ANSWER two years from now
18) Michael, a 62-year-old single man, is considering beginning his Social Security benefits to
supplement his income of $14,000 per year. How much will he lose in Social Security benefits
due to the earned income restrictions? - ANSWER 0
,19) If provisional income exceeds all the thresholds given, then a maximum of ___________ of
Social Security benefits are subject to taxation. - ANSWER 85%
20) Brent and Carol are married and file jointly. They have an AGI of $50,000 and they receive a
combined Social Security benefit of $15,000. They have no tax-exempt income. What is the
maximum percentage of their Social Security benefit that will be subject to taxation? - ANSWER
85
21) Spousal retirement benefits can be claimed as early as age ______. - ANSWER 62
22) Jeff and Betsy both attained their FRA in time to employ the "restricted application for spouses"
strategy. Jeff's PIA at his FRA was $2,000 and Betsy's was $1,200. If they employ the "restricted
application for spouses" strategy, Betsy will begin receiving $_____ per month. - ANSWER 1,200
23) Carla is collecting $600 per month from a government pension and is also eligible to receive a
Social Security spousal benefit of $1,000 per month. Due to the GPO, her Social Security spousal
benefit will be reduced to ____________. - ANSWER 600
24) David began receiving Social Security benefits in June 2020. 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. - ANSWER June 2021
25) Jerry was born in 1954. What age does Social Security consider to be his full retirement age
(FRA)? - ANSWER 66
26) Mary is 69 years old. She is receiving $1,800 per month in Social Security. Her husband Ralph,
age 67, who has not worked enough quarters outside the home to be covered in his own right,
receives 50% of what Mary receives each month ($900). Assume that Mary dies tomorrow. What
will Ralph's Social Security benefit be? Assume he has reached his survivor FRA. - ANSWER 1,800
27) Bob and Helen just won the lottery. The benefit this year will be $50,000, and it will increase
over the next 19 years. Bob's monthly Social Security benefit is $1,800; Helen's monthly Social
Security benefit is $1,200. Bob is age 68, and Helen is age 69. Which one of the following is a
correct statement about Bob and Helen's old-age Social Security benefits? - ANSWER Up to 85%
of their Social Security benefit must be included in gross income.
, 28) Henry and his wife Etta will both reach their FRAs this month, and they both plan to begin
receiving Social Security benefits next month. Etta's primary insurance amount (PIA) is $1,900;
Henry's PIA is $975. What will their maximum Social Security benefit be? - ANSWER They will
both receive their respective PIAs.
29) Which one of the following is a correct statement about old-age Social Security benefits? -
ANSWER Old-age Social Security benefits are not reduced for persons who have attained their
Social Security FRA regardless of the amount of earned income received.
30) Jill and Mark are celebrating their 20th wedding anniversary, receiving a 20-year watch from
their employer, and reaching FRA all on the same day with a trip to the beach. Which of the
following statements correctly describe the Social Security benefit Jill is eligible to receive? -
ANSWER 100% of her own benefit
31) An individual's Social Security payment amount will be adjusted annually to account for
increases in inflation as measured by the _____________. - ANSWER CPI-W
32) Higher income earners will have an income replacement ratio that is - ANSWER lower than low
income earners.
33) On average, Social Security represents ______ of the income of the elderly. - ANSWER 33
34) 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? -
ANSWER He should wait until age 60 to remarry.
35) Which one of the following counts as "earnings" for the Social Security earnings test? - ANSWER
Self-employment net earnings
36) Carl is going to reach FRA later in the current year. He has begun Social Security benefits but is
still working. His Social Security benefits will - ANSWER be reduced $1 for every $3 earned above
the earnings cap.
CORRECT ANSWERS) |LATEST VERSION |ALREADY GRADED A+
1) A worker's primary insurance amount (PIA) is the amount they receive from Social Security -
ANSWER if he or she began payments at full retirement age.
2) For a worker whose full retirement age is 66 or later, the annual delayed retirement credit
percentage for the years you delay receipt of benefits beyond (FRA) is - ANSWER 8
3) The provision that certain mutual fund policies cannot be changed without shareholder approval
is addressed in the - ANSWER Investment Company Act of 1940.
4) A major responsibility of FINRA is - ANSWER developing rules and regulations for its members.
5) The recent regulatory and industry developments regarding fiduciary advice will most likely -
ANSWER increase client expectations of advisers and put downward pressure on fees.
6) Which act repealed a prohibition that had been in place preventing financial institutions from
offering a combination of commercial banking, investment banking, and insurance services? -
ANSWER Gramm-Leach-Bliley Act of 1999
7) The Employee Retirement Income Security Act (ERISA) was primarily passed because of concern
regarding the integrity and safety of - ANSWER employer-sponsored retirement plans.
8) An investment professional who reads investment journals is complying with the - ANSWER duty
to keep current.
9) You sell your client a GNMA based on your explanation that they are "safe" because they are
guaranteed by the U.S. government. In which one of the following ethical duties may you have
failed your customer? - ANSWER Duty to disclose
,10) Confidentiality is an important ethical obligation for all those who render investment advice. The
CFP Board, however, allows the unauthorized disclosure of confidential client information in -
ANSWER connection with a civil dispute between a CFP certificant and a client.
11) A potential client, Ross, is contacted by Amy, an investment professional with a fiduciary
responsibility to her clients. Ross is interested in trading complex options and is willing to open
an account if Amy is knowledgeable about options. Amy implies to Ross that she is an expert in
option trading but, in fact, knows only the basic elements of it. Looking solely at Amy's lack of
competency in this area, which fiduciary duty has not been met? - ANSWER Duty of care
12) The fundamental duty of a fiduciary adviser is to look out for the client's best interest. Which
fiduciary duty is most directly tied to making sure all actions are being made solely for the
benefit of the client? - ANSWER Duty of loyalty
13) The "suitability rule" is one of the key rules of the - ANSWER FINRA Conduct Rules.
14) Which one of the following statements comparing the suitability standard and the fiduciary
standard is correct? - ANSWER Verbal disclosure may be adequate under the suitability standard
but not the fiduciary standard.
15) In 2010 Dodd Frank tasked the SEC to study the feasibility of drafting a harmonized fiduciary
standard for both investment advisers and broker-dealers. In April 2018 the SEC proposed -
ANSWER continuing both a suitability standard for brokers and a fiduciary standard for advisers.
16) Delaying receipt of benefits (for example until age 70) will result in all of the following except -
ANSWER permanently reduced benefit amount.
17) Ann has reached her full retirement age (FRA) of 66 in 2020. She can elect to receive $1,000
now, or delay receipt by two years. She expects to live until age 90. Ignoring outside factors,
when should she begin her benefits? - ANSWER two years from now
18) Michael, a 62-year-old single man, is considering beginning his Social Security benefits to
supplement his income of $14,000 per year. How much will he lose in Social Security benefits
due to the earned income restrictions? - ANSWER 0
,19) If provisional income exceeds all the thresholds given, then a maximum of ___________ of
Social Security benefits are subject to taxation. - ANSWER 85%
20) Brent and Carol are married and file jointly. They have an AGI of $50,000 and they receive a
combined Social Security benefit of $15,000. They have no tax-exempt income. What is the
maximum percentage of their Social Security benefit that will be subject to taxation? - ANSWER
85
21) Spousal retirement benefits can be claimed as early as age ______. - ANSWER 62
22) Jeff and Betsy both attained their FRA in time to employ the "restricted application for spouses"
strategy. Jeff's PIA at his FRA was $2,000 and Betsy's was $1,200. If they employ the "restricted
application for spouses" strategy, Betsy will begin receiving $_____ per month. - ANSWER 1,200
23) Carla is collecting $600 per month from a government pension and is also eligible to receive a
Social Security spousal benefit of $1,000 per month. Due to the GPO, her Social Security spousal
benefit will be reduced to ____________. - ANSWER 600
24) David began receiving Social Security benefits in June 2020. 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. - ANSWER June 2021
25) Jerry was born in 1954. What age does Social Security consider to be his full retirement age
(FRA)? - ANSWER 66
26) Mary is 69 years old. She is receiving $1,800 per month in Social Security. Her husband Ralph,
age 67, who has not worked enough quarters outside the home to be covered in his own right,
receives 50% of what Mary receives each month ($900). Assume that Mary dies tomorrow. What
will Ralph's Social Security benefit be? Assume he has reached his survivor FRA. - ANSWER 1,800
27) Bob and Helen just won the lottery. The benefit this year will be $50,000, and it will increase
over the next 19 years. Bob's monthly Social Security benefit is $1,800; Helen's monthly Social
Security benefit is $1,200. Bob is age 68, and Helen is age 69. Which one of the following is a
correct statement about Bob and Helen's old-age Social Security benefits? - ANSWER Up to 85%
of their Social Security benefit must be included in gross income.
, 28) Henry and his wife Etta will both reach their FRAs this month, and they both plan to begin
receiving Social Security benefits next month. Etta's primary insurance amount (PIA) is $1,900;
Henry's PIA is $975. What will their maximum Social Security benefit be? - ANSWER They will
both receive their respective PIAs.
29) Which one of the following is a correct statement about old-age Social Security benefits? -
ANSWER Old-age Social Security benefits are not reduced for persons who have attained their
Social Security FRA regardless of the amount of earned income received.
30) Jill and Mark are celebrating their 20th wedding anniversary, receiving a 20-year watch from
their employer, and reaching FRA all on the same day with a trip to the beach. Which of the
following statements correctly describe the Social Security benefit Jill is eligible to receive? -
ANSWER 100% of her own benefit
31) An individual's Social Security payment amount will be adjusted annually to account for
increases in inflation as measured by the _____________. - ANSWER CPI-W
32) Higher income earners will have an income replacement ratio that is - ANSWER lower than low
income earners.
33) On average, Social Security represents ______ of the income of the elderly. - ANSWER 33
34) 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? -
ANSWER He should wait until age 60 to remarry.
35) Which one of the following counts as "earnings" for the Social Security earnings test? - ANSWER
Self-employment net earnings
36) Carl is going to reach FRA later in the current year. He has begun Social Security benefits but is
still working. His Social Security benefits will - ANSWER be reduced $1 for every $3 earned above
the earnings cap.
