AFC CERTIFICATION PRE-ASSESSMENT QUESTIONS
Which one of the following desk or table shapes is more likely to create an atmosphere
of inequality?
a. Round
b. Square
C. Oval
d. Rectangle - Answers - Rectangle
Credit can be very positive when used properly, and the highest interest rates are
charged on _____________________.
a. HELOC lines of credit
b. HELOC lump sum loans
c. Balance transfer loans
d. Cash advance loans. - Answers - Cash advance loans.
Which of the following factors affects a credit score?
a. The number of bank accounts recently opened.
b. The number of new credit cards recently opened.
c. The number of people authorized to use a credit card.
d. The number of debit cards used each month. - Answers - The number of new credit
cards recently opened.
A married couple would like to examine the potential of using their home equity to
borrow funds in order to remodel their kitchen at a cost of $17,000. The couple
purchased the home 3 years ago for its market value of $135,000. The interest rate on
their 30-year fixed-rate mortgage is 4.25% and they were able to put down a 5% down
payment towards the purchase. The market value of the home has grown at 2.5% per
year and the current balance owed on the mortgage is $121,478. If the local Credit
Union is offering to lend the couple up to 80% of their home equity in the form of a home
equity loan to remodel their kitchen, will they be able to borrow the money necessary to
complete the project this third year? How much of the homeowner's equity will they
need?
a. Yes, they only need to borrow 71% of their homeowner's equity.
b. Yes, they only need to borrow 63% of their homeowner's
c. No, they would need to borrow 82% of t - Answers - Yes, they only need to borrow
71% of their homeowner's equity.
A client has incurred a large amount of credit card debt during an extended stretch of
unemployment. Although now fully employed with a livable salary, she is struggling with
the organizational skills necessary to repay all of the accounts. She is concerned with
her ability to borrow funds to purchase a home within 5 years and wants to pay the least
amount of money possible. Which is the client's best option for dealing with this debt
situation?
a. Chapter 7 Bankruptcy
, b. A Consumer Credit Counseling Agency Debt Management Program (DMP)
c. A self-administered debt repayment plan
d. Chapter 13 Bankruptcy - Answers - A Consumer Credit Counseling Agency Debt
Management Program (DMP)
When helping a client determine if they should rent or buy a home, the client should
know_________________.
a. renting is the least expensive option over the long term
b. buying is the least expensive option over the long term
c. condominiums do not have HOA fees
d. single family homes do not have HOA fees - Answers - buying is the least expensive
option over the long term
Which of the following types of analysis helps the client identify strengths, opportunities,
and weaknesses?
a. GAP
b. SWOT
c. Financial
d. Behavioral - Answers - SWOT
A client is a typical, healthy, 36-year-old mother of two young children who is
considering buying life insurance to ensure her children are cared for until they are self-
sufficient. Which type of life insurance should she buy? a. Whole life
b. Cash value
Correct! c. Term
d. Hybrid - Answers - Term
A client recently inherited $10,000 and would like to have the money actively managed
at their brokerage company. Which of the following type of investments might match the
client's preferences?
a. A target mutual fund based on the estimated year of retirement.
b. An index-based mutual fund based on the Dow Jones index.
c. An exchange-traded index fund.
d. Exchange-traded funds based on a specific commodity. - Answers - d. Exchange-
traded funds based on a specific commodity.
If a client has a lower risk tolerance, which investments should they consider?
a. Stocks and bitcoin
b. Stocks and bonds
c. Bonds and mutual funds
d. Bonds and cryptocurrency - Answers - c. Bonds and mutual funds
A retired married couple is wanting to better understand how to meet their household
expenses of $50,000 for the upcoming year and minimize income taxes. One spouse is
a 71-year-old and drawing Social Security payments and a state teacher's pension. The
Which one of the following desk or table shapes is more likely to create an atmosphere
of inequality?
a. Round
b. Square
C. Oval
d. Rectangle - Answers - Rectangle
Credit can be very positive when used properly, and the highest interest rates are
charged on _____________________.
a. HELOC lines of credit
b. HELOC lump sum loans
c. Balance transfer loans
d. Cash advance loans. - Answers - Cash advance loans.
Which of the following factors affects a credit score?
a. The number of bank accounts recently opened.
b. The number of new credit cards recently opened.
c. The number of people authorized to use a credit card.
d. The number of debit cards used each month. - Answers - The number of new credit
cards recently opened.
A married couple would like to examine the potential of using their home equity to
borrow funds in order to remodel their kitchen at a cost of $17,000. The couple
purchased the home 3 years ago for its market value of $135,000. The interest rate on
their 30-year fixed-rate mortgage is 4.25% and they were able to put down a 5% down
payment towards the purchase. The market value of the home has grown at 2.5% per
year and the current balance owed on the mortgage is $121,478. If the local Credit
Union is offering to lend the couple up to 80% of their home equity in the form of a home
equity loan to remodel their kitchen, will they be able to borrow the money necessary to
complete the project this third year? How much of the homeowner's equity will they
need?
a. Yes, they only need to borrow 71% of their homeowner's equity.
b. Yes, they only need to borrow 63% of their homeowner's
c. No, they would need to borrow 82% of t - Answers - Yes, they only need to borrow
71% of their homeowner's equity.
A client has incurred a large amount of credit card debt during an extended stretch of
unemployment. Although now fully employed with a livable salary, she is struggling with
the organizational skills necessary to repay all of the accounts. She is concerned with
her ability to borrow funds to purchase a home within 5 years and wants to pay the least
amount of money possible. Which is the client's best option for dealing with this debt
situation?
a. Chapter 7 Bankruptcy
, b. A Consumer Credit Counseling Agency Debt Management Program (DMP)
c. A self-administered debt repayment plan
d. Chapter 13 Bankruptcy - Answers - A Consumer Credit Counseling Agency Debt
Management Program (DMP)
When helping a client determine if they should rent or buy a home, the client should
know_________________.
a. renting is the least expensive option over the long term
b. buying is the least expensive option over the long term
c. condominiums do not have HOA fees
d. single family homes do not have HOA fees - Answers - buying is the least expensive
option over the long term
Which of the following types of analysis helps the client identify strengths, opportunities,
and weaknesses?
a. GAP
b. SWOT
c. Financial
d. Behavioral - Answers - SWOT
A client is a typical, healthy, 36-year-old mother of two young children who is
considering buying life insurance to ensure her children are cared for until they are self-
sufficient. Which type of life insurance should she buy? a. Whole life
b. Cash value
Correct! c. Term
d. Hybrid - Answers - Term
A client recently inherited $10,000 and would like to have the money actively managed
at their brokerage company. Which of the following type of investments might match the
client's preferences?
a. A target mutual fund based on the estimated year of retirement.
b. An index-based mutual fund based on the Dow Jones index.
c. An exchange-traded index fund.
d. Exchange-traded funds based on a specific commodity. - Answers - d. Exchange-
traded funds based on a specific commodity.
If a client has a lower risk tolerance, which investments should they consider?
a. Stocks and bitcoin
b. Stocks and bonds
c. Bonds and mutual funds
d. Bonds and cryptocurrency - Answers - c. Bonds and mutual funds
A retired married couple is wanting to better understand how to meet their household
expenses of $50,000 for the upcoming year and minimize income taxes. One spouse is
a 71-year-old and drawing Social Security payments and a state teacher's pension. The
