Dan Madden, CFP® – Page 5 – Online CFP Program

American Depository Receipts

Course: Investment PlanningLesson 4: International Equity Securities Student Question: Hi, On the CFP board practice question (below), the correct answer was “4 only.” How come ADRs don’t eliminate currency risk? Aren’t they purchased and sold with US dollars? American depository receipts (ADRs) are used to Instructor Response: Hi Great question. I can see exactly why you…

Required Minimum Distributions

In 2026, James turns age 73. He owns the following retirement accounts: Traditional IRA: $480,000 Former employer’s 401(k): $320,000 Roth IRA: $150,000 James is retired and does not work for the employer sponsoring the 401(k). What is James’s minimum required distribution obligation for 2026? RMDs must be taken from the traditional IRA and the 401(k), but…

Accounting for Inflation

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: Hi, Good afternoon. Can you explain why we didn’t take inflation into consideration for the second calculation in the first problem? Kind regards, Austin Dawn wants to have $25,000 in today’s dollars for a round-the-world cruise when she retires 11 years from now. She…

The Business Cycle

Which phase of the business cycle is typically characterized by declining corporate profits, rising unemployment, tightening credit conditions, and falling consumer confidence? Expansion Peak Contraction Trough CLICK TO REVEAL ANSWER Expand C is the answer.

529 Plan Contribution Limits

Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hi, Do the limits on 529 plan contributions apply to that specific account, the child, or the contributor? Is it possible for a contributor to have more than one 529 plan, if they’ve reached the limit on one? Instructor Response: Hi Good question. It’s…

Social Security Disability Insurance Eligibility

In 2026, Thomas is age 45 and works as an electrician. Due to a severe spinal injury, he is no longer able to perform substantial work. His physician expects the condition to last at least 18 months. Thomas currently earns $3,820 per month from part-time consulting work. He is not blind and has sufficient work credits to…

Internal Rate of Return Calculation

Course: Fundamentals of Financial PlanningLesson 5b: Using the HP 10bII Calculator Student Question: Hi, 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…

Backdoor Roth IRA Taxation

In 2026, Maria, age 52, is single and has MAGI of $210,000, making her ineligible to contribute directly to a Roth IRA. She makes a $7,500 nondeductible contribution to a traditional IRA and immediately converts the entire balance to a Roth IRA. At the time of conversion, Maria also owns a rollover traditional IRA from a former…

Replacement Cost Reimbursement

Course: Insurance PlanningLesson 6: Commercial Property and Liability Insurance Student Question: Hi, The way I understand the example below is that since the cost, current value and depreciation are not relevant, it seemed to me that the building is only insured for 77.77% of its replacement value ($14,000,000/$18,000,000). This would lead to the payout from…

Dying Intestate

If a client dies intestate, which of the following statements is correct? All assets automatically pass by beneficiary designation The state determines how probate assets are distributed The executor can distribute assets according to verbal wishes Property held jointly with rights of survivorship becomes subject to probate CLICK TO REVEAL ANSWER Expand B is the…