Dan Madden, CFP® – Page 16 – Online CFP Program

Refinance Payment Calculation

Sharon refinanced her home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if she owed $150,000 at the time of the refinance and the interest rate is 6%? $415 $589 $691 $702 CLICK TO REVEAL ANSWER Expand A is the answer. Sharon pays her mortgage every two weeks which…

Using Jensen Performance Index

Based on the Jensen performance index, which fund should the investor continue to hold given the following information? Fund 1 Fund 2 Return on Portfolio 13% 17% Beta .95 1.02 Standard Deviation .18 .22 Risk free rate of return is 7% Market return is 15% Fund 1 Fund 2 Both Fund 1 and 2 Neither…

CFP Board to host Technology Standard Webinar

CFP® Board Updates On April 17, 2024, the CFP Board will host the “Guide to CFP Board’s Technology Standard” webinar. The webinar will provide a comprehensive breakdown of the recently released “Guide to CFP Board’s Technology Standard. This guide is a resource to assist CFP® Professionals in complying with the “Duty When Selecting, Using and…

Annual Return and Compounding

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board exam will require an annual, or other period for the answer. Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate…

Who is an Investment Advisor?

Which of the following individuals need to register with the SEC under the Investment Advisers Act of 1940? Adam who retired last year from a big brokerage house but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda who writes weekly investment articles for…

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 $120 and the reinvestment rate is 7%. What is the realized compound yield of this bond? 8.01% 9.71% 11.00% 12.10% CLICK TO REVEAL ANSWER Expand B is the answer. One would anticipate a realized compound yield…

Selecting an Appropriate Trust

Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…

Sale of Home by Surviving Spouse

April’s husband Jay died 5 years ago when their home was worth $600,000. Due to the soft real estate market, April kept the house until the housing market recovered. She finally sold the home this year for $950,000. What is the amount of April’s taxable gain or loss if she bought the home jointly with…

Transfer of Interest in Property Held in Joint Tenancy

Gary Chapelle owns a duplex with his brother in joint tenancy with right of survivorship. Gary would like to pass his interest in the property to his son, Bill, and Gary has provided in his will that his interest in the duplex will pass to Bill. Which of the following statements concerning the transfer of…

Basis on Sale of Gifted Stock

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…