Dan Madden, CFP® – Page 25 – Online CFP Program

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…

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…

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 Establishing Competency Standards Commission

CFP® Board Updates The CFP Board has announced they will be forming a Competency Standards Commission in 2023. The purpose of the commission will be to review and evaluate the CFP Board’s competency requirements for Education, Examination, Experience, and Continuing Education. The commission will be comprised of volunteers selected from financial services firms, educators, certification…

Characteristics of a Will

Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2) A will cannot be rewritten but can be amended at any time by a codicil. (3) A will must be signed by the maker and usually must…

Power of Attorney over Financial Affairs

Laura is concerned she will develop Alzheimer’s disease later in life similar to her mother. Which of the following documents should Laura execute to make sure her son is able to handle her financial affairs in the event she does develop Alzheimer’s disease? Durable springing power of attorney Nondurable springing power of attorney Durable nonspringing…