CRPC FINAL OVER 170 EXAM QUESTIONS 2026/2027 ||
COMPREHENSIVE CERTIFIED RETIREMENT PLANNING
COUNSELOR EXAM PREPARATION WITH UPDATED
INDUSTRY STANDARDS AND STRUCTURED REVIEW
SUPPORT || REAL CRPC-STYLE QUESTIONS WITH VERIFIED
DETAILED ACCURATE ANSWERS LATEST EDITION || ELITE
A+ PREMIUM QUALITY GUARANTEED
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? - THE
CORRECT ANSWER - Set your calculator to the "End" mode and "1 P/Yr."
Inputs: FV = 2000000, I/YR = 7, N = 25, PV = 0, then PMT = $31,621
1-4
Bill and Lisa Hahn have determined that they will need a monthly income of
$6,000 during retirement. They expect to receive Social Security retirement
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? - THE CORRECT ANSWER - The 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:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
,Chris and Eve Bronson have analyzed their current living expenses and estimated
their retirement income need, net of expected Social Security benefits, to be
$90,000 in today's dollars. They are confident that they can earn a 7% after-tax
return on their investments, and they expect inflation to average 4% over the long
term.
Determine the lump sum amount the Bronsons will need at the beginning of
retirement to fund their retirement income needs, using the worksheet below.
(1) Adjust income deficit for inflation over the preretirement period:$
90,000present value of retirement income deficit25number of periods until
retirement4%% inflation rateFuture value of income deficit in first retirement
year$239,925
(2) Determine retirement fund needed to meet income deficit:$239,925payment
(future value of income deficit in first retirement year)30number of periods in
retirement
The lump sum needed at the beginning of the - THE CORRECT ANSWER
- This PVAD calculation requires that the calculator be set for beginning-of-
period payments. First, the annual retirement income deficit is expressed in
retirement-year-one dollars, resulting in a $239,925 income deficit in the first
retirement year. This income deficit grows with inflation over the 30-year
retirement period, and the retirement fund earns a 7% return.
The calculator inputs are
$239,925, [PMT];
30, [N];
2.8846, [I/YR]. (1.07/1.04)-1 x100
Solve for [PV],
to determine the retirement fund that will generate this income stream. If you
enter 2.8846 directly into the calculator, you will get $4,911,265. If you use the
equation to compute I/YR, and then hit the I/YR button you will get $4,911,256.
Either way the answer is clear. The difference is that when you calculate the I/YR,
the calculator takes the interest rate out to nine decimal places. If you enter in the
2.8846, then the calculator only takes the interest rate to four decimal places.
LO 1-4
Assume a client and investment professional have worked together for several
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?
A)
gather data
B)
analyze information
C)
make and implement recommendations
D)
monitor performance - THE CORRECT ANSWER - When the client's
circumstances change, the asset management process goes back to the data
gathering step in the process. A
LO 1-2
Which one of the following is not a key attribute of an investment policy?
A)
clearly defined
B)
fluid
C)
realistic
D)
long-term perspective - THE CORRECT ANSWER - An investment policy
provides guidelines that are standards to be followed. If they are fluid, they are
ever-changing and therefore would be difficult to implement and would provide
inconsistency in the management of the portfolio.
LO 2-1
Fluid
All of these are examples of asset allocation strategies except
A)
alpha.
B)
tactical.
C)
core/satellite.
D)
strategic. - THE CORRECT ANSWER - Alpha is not an asset allocation
strategy, but a way to measure a portfolio manager's return relative to the amount
of risk that has been taken. alpha
LO 2-5
, Assume the following asset classes have the correlations to long-term
government bonds shown below:
Treasury bills:.12
Gold:-.25
Large stocks:.22
Small stocks:.17
Which one of the following best exemplifies the impact of diversification on
long-term government bonds? - THE CORRECT ANSWER - The asset with
the lowest correlation provides the most diversification. Therefore, gold provides
more diversification than any of the other assets. Small stocks do provide more
diversification than Treasury bills, but
gold provides the most diversification, so it is the best option.
LO 2-3
The two major risks associated with individual common stocks are
A)
default risk and business risk.
B)
market risk and business risk.
C)
interest rate risk and exchange rate risk.
D)
interest rate risk and purchasing power risk. - THE CORRECT ANSWER -
The primary risks associated with common stock are business risk and market
risk.
Interest rate risk, default risk, and purchasing power risk are the major risks of
bonds.
B
LO 2-2
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%?
A)
$1,115.57
B)
$893.23
COMPREHENSIVE CERTIFIED RETIREMENT PLANNING
COUNSELOR EXAM PREPARATION WITH UPDATED
INDUSTRY STANDARDS AND STRUCTURED REVIEW
SUPPORT || REAL CRPC-STYLE QUESTIONS WITH VERIFIED
DETAILED ACCURATE ANSWERS LATEST EDITION || ELITE
A+ PREMIUM QUALITY GUARANTEED
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? - THE
CORRECT ANSWER - Set your calculator to the "End" mode and "1 P/Yr."
Inputs: FV = 2000000, I/YR = 7, N = 25, PV = 0, then PMT = $31,621
1-4
Bill and Lisa Hahn have determined that they will need a monthly income of
$6,000 during retirement. They expect to receive Social Security retirement
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? - THE CORRECT ANSWER - The 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:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
,Chris and Eve Bronson have analyzed their current living expenses and estimated
their retirement income need, net of expected Social Security benefits, to be
$90,000 in today's dollars. They are confident that they can earn a 7% after-tax
return on their investments, and they expect inflation to average 4% over the long
term.
Determine the lump sum amount the Bronsons will need at the beginning of
retirement to fund their retirement income needs, using the worksheet below.
(1) Adjust income deficit for inflation over the preretirement period:$
90,000present value of retirement income deficit25number of periods until
retirement4%% inflation rateFuture value of income deficit in first retirement
year$239,925
(2) Determine retirement fund needed to meet income deficit:$239,925payment
(future value of income deficit in first retirement year)30number of periods in
retirement
The lump sum needed at the beginning of the - THE CORRECT ANSWER
- This PVAD calculation requires that the calculator be set for beginning-of-
period payments. First, the annual retirement income deficit is expressed in
retirement-year-one dollars, resulting in a $239,925 income deficit in the first
retirement year. This income deficit grows with inflation over the 30-year
retirement period, and the retirement fund earns a 7% return.
The calculator inputs are
$239,925, [PMT];
30, [N];
2.8846, [I/YR]. (1.07/1.04)-1 x100
Solve for [PV],
to determine the retirement fund that will generate this income stream. If you
enter 2.8846 directly into the calculator, you will get $4,911,265. If you use the
equation to compute I/YR, and then hit the I/YR button you will get $4,911,256.
Either way the answer is clear. The difference is that when you calculate the I/YR,
the calculator takes the interest rate out to nine decimal places. If you enter in the
2.8846, then the calculator only takes the interest rate to four decimal places.
LO 1-4
Assume a client and investment professional have worked together for several
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?
A)
gather data
B)
analyze information
C)
make and implement recommendations
D)
monitor performance - THE CORRECT ANSWER - When the client's
circumstances change, the asset management process goes back to the data
gathering step in the process. A
LO 1-2
Which one of the following is not a key attribute of an investment policy?
A)
clearly defined
B)
fluid
C)
realistic
D)
long-term perspective - THE CORRECT ANSWER - An investment policy
provides guidelines that are standards to be followed. If they are fluid, they are
ever-changing and therefore would be difficult to implement and would provide
inconsistency in the management of the portfolio.
LO 2-1
Fluid
All of these are examples of asset allocation strategies except
A)
alpha.
B)
tactical.
C)
core/satellite.
D)
strategic. - THE CORRECT ANSWER - Alpha is not an asset allocation
strategy, but a way to measure a portfolio manager's return relative to the amount
of risk that has been taken. alpha
LO 2-5
, Assume the following asset classes have the correlations to long-term
government bonds shown below:
Treasury bills:.12
Gold:-.25
Large stocks:.22
Small stocks:.17
Which one of the following best exemplifies the impact of diversification on
long-term government bonds? - THE CORRECT ANSWER - The asset with
the lowest correlation provides the most diversification. Therefore, gold provides
more diversification than any of the other assets. Small stocks do provide more
diversification than Treasury bills, but
gold provides the most diversification, so it is the best option.
LO 2-3
The two major risks associated with individual common stocks are
A)
default risk and business risk.
B)
market risk and business risk.
C)
interest rate risk and exchange rate risk.
D)
interest rate risk and purchasing power risk. - THE CORRECT ANSWER -
The primary risks associated with common stock are business risk and market
risk.
Interest rate risk, default risk, and purchasing power risk are the major risks of
bonds.
B
LO 2-2
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%?
A)
$1,115.57
B)
$893.23
