CRPC PRACTICE EXAMINATION PAPER 1 2026
FULL QUESTIONS AND SOLUTIONS 100%
CORRECT
◉ 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? Answer: gather data
◉ Which one of the following is not a key attribute of an investment
policy Answer: fluid
◉ All of these are examples of asset allocation strategies except
Answer: alpha
◉ When determining what provides the most diversification
Answer: the further away from +1, the more diversification
◉ The two major risks associated with individual common stocks
are Answer: market risk and business risk
,◉ Risks associated with bonds: Answer: 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%? Answer: 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? Answer: 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)?
Answer: 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? Answer: 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". Answer: She should delay only if she expects to
live beyond the next 15 and a half years of so.
FULL QUESTIONS AND SOLUTIONS 100%
CORRECT
◉ 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? Answer: gather data
◉ Which one of the following is not a key attribute of an investment
policy Answer: fluid
◉ All of these are examples of asset allocation strategies except
Answer: alpha
◉ When determining what provides the most diversification
Answer: the further away from +1, the more diversification
◉ The two major risks associated with individual common stocks
are Answer: market risk and business risk
,◉ Risks associated with bonds: Answer: 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%? Answer: 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? Answer: 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)?
Answer: 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? Answer: 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". Answer: She should delay only if she expects to
live beyond the next 15 and a half years of so.
