Dan Madden, CFP® – Online CFP Program

Calculating Realized Compound Yield on a Bond

An investor bought a bond at par that matures in 15 years. The bond pays an annual coupon of $130 and the reinvestment rate is 9%. What is the realized compound yield of this bond? 11.05% 12.55% 13.00% 14.10% CLICK TO REVEAL ANSWER Expand A is the answer. One would anticipate a realized compound yield…

CFP Board Announces Dates for 2023 Conference

CFP® Board Updates The 2023 CFP Board Conference will again be a combined conference of CFP Board Registered Programs and the Annual Firms Summit. Through combined sessions as well as firm and registered program specific tracks, conference attendees will have a special opportunity to meet, network, and share knowledge that advances their roles in and…

Defining an Insurance Contract

Olivia is a 25-year old single mother with twin girls who just turned three. Olivia has worked for the last 5 years as an administrative assistant for a local law firm. Olivia’s firm provides her with a basic medical insurance policy and a split definition disability. Which of the following is the biggest risk exposure…

Debt Discharged in Chapter 7 Bankruptcy

Chuck lost his job last year when his company moved their factory overseas. Chuck has been unable to find another job and had to file for a Chapter 7 bankruptcy. Which of the following debts can be discharged in the bankruptcy? $10,000 of rent he owes his landlord $20,000 of taxes he owes the IRS…

Defining a Stock Spread

Which of the following combinations correctly describes a spread? A combination of a short sale and a purchase of a call for the same stock A combination of buying and selling calls on the same stock with different expiration dates and exercise prices A combination of a put and a call on the same stock…

Appropriate Valuation Method

Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: An apartment building in downtown New York that Sam owns with three partners, each of whom wants…

CFP Board Establishes 501(c)(6) to Focus on Workforce Development

CFP® Board Updates The CFP Board announced in January that they have established a new 501(c)(6) to help achieve their strategic workforce development priorities. The end result will be a 501(c)(3) called the CFP Board Center for Financial Planning and a 501(c)(6) called the CFP Board of Standards. Why are they taking this action? The…

Section 179 Expensing

Which of the following expenses can Vicki expense entirely under Section 179 expense assuming she meets all other requirements? $10,000 for a new coat of paint in the lobby and office. $20,000 for a new roof on the warehouse $30,000 for vacation $25,000 for new computers CLICK TO REVEAL ANSWER Expand D is the answer.…

Internal Rate of Return Calculation

Course: Fundamentals of Financial PlanningLesson 5b: Using the HP 10bII Calculator Student Question: In Example 2, the solution given has 6 years (including CF0) instead of 5. I believe the first year of Carl’s coin purchase should be CF0, but the fifth year – which includes a purchase and a sale – should be CF4.…

OASDI Disability Income Benefits

Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…