CFP TEST GUIDE WITH 100% CORRECT ANSWERS

Lisa purchased 500 shares of XYZ stock trading at $40 per share, with an initial margin requirement of 60% and a maintenance margin of 30%. At What price would Lisa receive a margin call? A. $20 B. $22.86 C. $57.14 D. $80.00 - correct answer️️B. $22.86 40*(1-.60)/ 1-.30= 22.86 Lareen purchased 1000 shares of CWC stock for $80 per share with an initial margin requirement of 65% and a maintenance margin of 40%. Assume the stock price falls to $30 per share, how much equity must Laureen contribute? A. $2/share B. $8/share C. $10/share D. $12/share - correct answer️️C. $10 per a share Required Equity Actual Equity Price: 30 Price: 30 Main. Margin *.40 Debt: (28) Required Equity 12 Actual: $2 Debt = $80* (1-.65) = $28 Required - Actual = contribution amount 12-2=10 MSFT declared a dividend payable to shareholders on the record date of Wed. May 15th. Which is the last possible date an investor could purchase the stock and still receive the dividend? A. purchased on May 13th B. purchased on May 12th C. purchased on May 11th D. purchased on May 10th - correct answer️️D. May 10th. Ex dividend date would be Monday the 13th, and in order to receive the dividend the investor would have to purchase prior to the ex-dividend date. Since the 13th is a Monday the last possible date an investor could purchase the stock and still receive the dividend would be Friday the 10th. If June 4 is the date of record, when must Joe purchase the stock in order to receive the dividend? A. June 1 B. June 2 C. June 3 D. June 4 E. May 31 - correct answer️️A. June 1st Date of record minus 3 days. When purchasing a stock you have to buy before the ex dividend date to receive the dividend. 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 answer️️A. 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