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1. A worker's primary insurance amount (PIA) is the amount they receive from
Social Security: 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: 8
3. Delaying receipt of benefits (for example until age 70) will result in all of the
following except: permanently reduced benefit amount.
4. 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?: two years from
now
5. 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?: 0
6. If provisional income exceeds all the thresholds given, then a maximum of
___________ of Social Security benefits are subject to taxation.: 85%
7. 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?: 85
8. Spousal retirement benefits can be claimed as early as age ______.: 62
9. 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.: 1,200
10. 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 ____________.: 600
11. 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.: June 2021
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12. Jerry was born in 1954. What age does Social Security consider to be his full
retirement age (FRA)?: 66
13. 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.: 1,800
14. 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?: Up to 85% of their Social Security benefit must be
included in gross income.
15. 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?: They will both receive their respective PIAs.
16. Which one of the following is a correct statement about old-age Social
Security benefits?: Old-age Social Security benefits are not reduced for persons who have attained their Socia
Security FRA regardless of the amount of earned income received.
17. 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?: 100% of her own benefit
18. An individual's Social Security payment amount will be adjusted annually to
account for increases in inflation as measured by the _____________.: CPI-W
19. Higher income earners will have an income replacement ratio that is: lower than
low income earners.
20. On average, Social Security represents ______ of the income of the elderly.: 33
21. 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?: He should wait until age 60 to remarry.
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22. Which one of the following counts as "earnings" for the Social Security
earnings test?: Self-employment net earnings
23. 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: be reduced
$1 for every $3 earned above the earnings cap.
24. Social Security payments are: taxable if your provisional income exceeds the applicable threshold.
25. Social Security provides individuals with protection against which of the
following risks?: All of these
26. Social Security began as a program to provide retirement income, but has
been expanded to provide all of the following income except: survivor benefits to spouse
caring for a child under 19.
27. Gary reached FRA this year (2020) and filed for his Social Security benefits.
His wife, Mary, is 62 and wishes to file for spousal benefits when she turns 63
later in 2020. If Gary's full benefit is $2,000, what will Mary's benefit be?: 725
28. Tammy doesn't begin her Social Security benefit at FRA (age 66), instead opt-
ing to delay while collecting delayed retirement credits. When she reaches age
68, however, she encounters financial difficulty and must file for her benefits.
How much will her payment have increased?: 16
29. It is January 15, 2020. Bill and Mary both attained age 66 in 2019. They want
to employ the restricted application strategy. Bill is the higher income earner.
What can be said about their options?: Bill should file a restricted application for spousal benefits
because he is the higher income earner.
30. Margaret is confused about her options and takes a friend's advice to file
and begin collecting benefits at age 62. Two years later, she attends one of
your seminars on Social Security and realizes that this was a mistake, as she
has sufficient personal assets to get her through until at least age 70 and her
life expectancy is nearly 100. What can you suggest to her?: She can voluntarily suspend
payments, keep the benefits she has received, and resume payments later at an increased rate.
31. Which one of the following is not an objective of an investment policy?: To select
individual securities
32. Which one of the following is not an appropriate element of an investment
policy?: The portfolio should maximize return and minimize risk.
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33. Which one of the following is not one of the steps in the asset allocation
process?: Establish guidelines for reaching goals
34. An investor has a 6%, 10,000 par value bond that matures in 15 years. The
yield to maturity on similar bonds currently is 5.5%. What is the price of this
bond?: $10,506.23
35. The Sharpe ratio measures: total risk as measured by standard deviation.
36. Growth stocks are characterized by: high P/E ratios.
37. Which one of the following is not a strategy associated with the practice of
tactical asset allocation?: Buying and holding an S&P 500 Index fund
38. Assume the standard deviation for a stock is 10 and its mean return is 14%.
What is the range of returns you would expect 68% of the time?: 4% and 24%
39. Stock A has an expected return of 15% and a standard deviation of 7.5%.
Stock B has an expected return of 18% and a standard deviation of 9%. Based
on the coefficient of variation, which stock has more relative risk?: Both have the
same relative risk.
40. Stock B has a beta of 1.2. If the market rises by 10%, Stock B can be expected
to: rise by 12%.
41. As an investor, you are optimistic about the near-term prospects of the
market. To enhance portfolio returns you would: choose securities with betas greater than
1.0.
42. A bond has a duration of eight years. If market interest rates rise by 1%, the
percentage price change of the bond is approximately: an 8% decline.
43. Dollar cost averaging is: purchasing shares with equal, periodic contributions.
44. Graham recommended that nonprofessional investors apply which one of
the following rules of thumb?: Buy stocks for two-thirds or less of their net current assets
45. Which one of the following apply to systematic risk?: It is a risk that is common to an
asset class.
46. Cash equivalents include all of the following except: Treasury notes.
47. Portfolio rebalancing involves: selling those assets that have appreciated significantly and reinvest-
ing in assets that have not performed well in order to get back to your original asset allocation.
48. Strategic asset allocation is: a "target allocation" approach to investing.
49. Unsystematic risk: is affected by the nature of how a firm finances its operations.
Study online at https://quizlet.com/_hvrjib
1. A worker's primary insurance amount (PIA) is the amount they receive from
Social Security: 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: 8
3. Delaying receipt of benefits (for example until age 70) will result in all of the
following except: permanently reduced benefit amount.
4. 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?: two years from
now
5. 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?: 0
6. If provisional income exceeds all the thresholds given, then a maximum of
___________ of Social Security benefits are subject to taxation.: 85%
7. 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?: 85
8. Spousal retirement benefits can be claimed as early as age ______.: 62
9. 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.: 1,200
10. 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 ____________.: 600
11. 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.: June 2021
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12. Jerry was born in 1954. What age does Social Security consider to be his full
retirement age (FRA)?: 66
13. 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.: 1,800
14. 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?: Up to 85% of their Social Security benefit must be
included in gross income.
15. 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?: They will both receive their respective PIAs.
16. Which one of the following is a correct statement about old-age Social
Security benefits?: Old-age Social Security benefits are not reduced for persons who have attained their Socia
Security FRA regardless of the amount of earned income received.
17. 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?: 100% of her own benefit
18. An individual's Social Security payment amount will be adjusted annually to
account for increases in inflation as measured by the _____________.: CPI-W
19. Higher income earners will have an income replacement ratio that is: lower than
low income earners.
20. On average, Social Security represents ______ of the income of the elderly.: 33
21. 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?: He should wait until age 60 to remarry.
, crpc
Study online at https://quizlet.com/_hvrjib
22. Which one of the following counts as "earnings" for the Social Security
earnings test?: Self-employment net earnings
23. 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: be reduced
$1 for every $3 earned above the earnings cap.
24. Social Security payments are: taxable if your provisional income exceeds the applicable threshold.
25. Social Security provides individuals with protection against which of the
following risks?: All of these
26. Social Security began as a program to provide retirement income, but has
been expanded to provide all of the following income except: survivor benefits to spouse
caring for a child under 19.
27. Gary reached FRA this year (2020) and filed for his Social Security benefits.
His wife, Mary, is 62 and wishes to file for spousal benefits when she turns 63
later in 2020. If Gary's full benefit is $2,000, what will Mary's benefit be?: 725
28. Tammy doesn't begin her Social Security benefit at FRA (age 66), instead opt-
ing to delay while collecting delayed retirement credits. When she reaches age
68, however, she encounters financial difficulty and must file for her benefits.
How much will her payment have increased?: 16
29. It is January 15, 2020. Bill and Mary both attained age 66 in 2019. They want
to employ the restricted application strategy. Bill is the higher income earner.
What can be said about their options?: Bill should file a restricted application for spousal benefits
because he is the higher income earner.
30. Margaret is confused about her options and takes a friend's advice to file
and begin collecting benefits at age 62. Two years later, she attends one of
your seminars on Social Security and realizes that this was a mistake, as she
has sufficient personal assets to get her through until at least age 70 and her
life expectancy is nearly 100. What can you suggest to her?: She can voluntarily suspend
payments, keep the benefits she has received, and resume payments later at an increased rate.
31. Which one of the following is not an objective of an investment policy?: To select
individual securities
32. Which one of the following is not an appropriate element of an investment
policy?: The portfolio should maximize return and minimize risk.
, crpc
Study online at https://quizlet.com/_hvrjib
33. Which one of the following is not one of the steps in the asset allocation
process?: Establish guidelines for reaching goals
34. An investor has a 6%, 10,000 par value bond that matures in 15 years. The
yield to maturity on similar bonds currently is 5.5%. What is the price of this
bond?: $10,506.23
35. The Sharpe ratio measures: total risk as measured by standard deviation.
36. Growth stocks are characterized by: high P/E ratios.
37. Which one of the following is not a strategy associated with the practice of
tactical asset allocation?: Buying and holding an S&P 500 Index fund
38. Assume the standard deviation for a stock is 10 and its mean return is 14%.
What is the range of returns you would expect 68% of the time?: 4% and 24%
39. Stock A has an expected return of 15% and a standard deviation of 7.5%.
Stock B has an expected return of 18% and a standard deviation of 9%. Based
on the coefficient of variation, which stock has more relative risk?: Both have the
same relative risk.
40. Stock B has a beta of 1.2. If the market rises by 10%, Stock B can be expected
to: rise by 12%.
41. As an investor, you are optimistic about the near-term prospects of the
market. To enhance portfolio returns you would: choose securities with betas greater than
1.0.
42. A bond has a duration of eight years. If market interest rates rise by 1%, the
percentage price change of the bond is approximately: an 8% decline.
43. Dollar cost averaging is: purchasing shares with equal, periodic contributions.
44. Graham recommended that nonprofessional investors apply which one of
the following rules of thumb?: Buy stocks for two-thirds or less of their net current assets
45. Which one of the following apply to systematic risk?: It is a risk that is common to an
asset class.
46. Cash equivalents include all of the following except: Treasury notes.
47. Portfolio rebalancing involves: selling those assets that have appreciated significantly and reinvest-
ing in assets that have not performed well in order to get back to your original asset allocation.
48. Strategic asset allocation is: a "target allocation" approach to investing.
49. Unsystematic risk: is affected by the nature of how a firm finances its operations.
