CFP Exam Questions (Latest Update 2026 /
2027) with Verified Answers 100 % Correct
[Grade A]
You are interviewing James Smith, CFP to manage your investments and provide
financial guidance in other areas of your life. James states that his investment
philosophy is as a contrarian; he buys securities that are losing favor and sells
securities that are gaining favor. You review his previous track record, which is about
equal with the market. His investments are typically in a security that has lost at least
10% for its most recent high. What type of bias is James exhibiting?
A. Anchoring
B. Herding
C. Overconfidence
D. Believe Perserverance - correct answer A. Anchoring
He is subject to anchoring. His belief is a stock that falls 10% for its high is likely to
return to that high. He is fixated on that high price.
,Kevin has subscribed to various investment magazines and data resources, which he
religiously reads and analyzes. Kevin utilizes this analysis to make shifts in his high
beta portfolio on a daily basis. Which behavioral finance bias is Kevin subject to?
A. Hindsight Bias
B. Overconfidence
C. Regret Avoidance
D. Herd Mentality - correct answer B. Overconfidence
This is a classic example of overconfidence. Kevin believes that his information is
perfect, that his analysis is perfect, so he trades too often and has a very risky
portfolio (high beta).
Which of the following would you use to ascertain the chairman's perspective for
progress completed and expected for the coming year?
A. 10K report.
, B. Annual report.
C. 10Q report.
D. Quarterly report - correct answer B. Annual Report
You own 1,000 shares of ePlace stock. You purchased these shares for $25 per share
on margin with a %50 initial margin requirement and a 25% maintenance margin
requirement. ePlace has experienced some reversals in the pummeling that tech
stocks have received recently. The price has dropped to $13 per share. Will there be a
margin call? If so, how much?
A. $1,500
B. $2,750
C. $3,250
D. No margin call required - correct answer B. $2,750
Required Equity = Stock price X Main. Margin ( 13*12.5= 3.25)
Actual Equity= Stock price - Debt ( 13-12.5=.5)
2027) with Verified Answers 100 % Correct
[Grade A]
You are interviewing James Smith, CFP to manage your investments and provide
financial guidance in other areas of your life. James states that his investment
philosophy is as a contrarian; he buys securities that are losing favor and sells
securities that are gaining favor. You review his previous track record, which is about
equal with the market. His investments are typically in a security that has lost at least
10% for its most recent high. What type of bias is James exhibiting?
A. Anchoring
B. Herding
C. Overconfidence
D. Believe Perserverance - correct answer A. Anchoring
He is subject to anchoring. His belief is a stock that falls 10% for its high is likely to
return to that high. He is fixated on that high price.
,Kevin has subscribed to various investment magazines and data resources, which he
religiously reads and analyzes. Kevin utilizes this analysis to make shifts in his high
beta portfolio on a daily basis. Which behavioral finance bias is Kevin subject to?
A. Hindsight Bias
B. Overconfidence
C. Regret Avoidance
D. Herd Mentality - correct answer B. Overconfidence
This is a classic example of overconfidence. Kevin believes that his information is
perfect, that his analysis is perfect, so he trades too often and has a very risky
portfolio (high beta).
Which of the following would you use to ascertain the chairman's perspective for
progress completed and expected for the coming year?
A. 10K report.
, B. Annual report.
C. 10Q report.
D. Quarterly report - correct answer B. Annual Report
You own 1,000 shares of ePlace stock. You purchased these shares for $25 per share
on margin with a %50 initial margin requirement and a 25% maintenance margin
requirement. ePlace has experienced some reversals in the pummeling that tech
stocks have received recently. The price has dropped to $13 per share. Will there be a
margin call? If so, how much?
A. $1,500
B. $2,750
C. $3,250
D. No margin call required - correct answer B. $2,750
Required Equity = Stock price X Main. Margin ( 13*12.5= 3.25)
Actual Equity= Stock price - Debt ( 13-12.5=.5)
