CFP® Practice Question: How To Analyze A Buyout Offer

Mary and Penny were equal partners in the ownership of a gift shop but after several disagreements, have decided to terminate the partnership. Mary offers to purchase Penny’s interest by paying either $20,000 today or $35,000 five years from today. If Penny’s opportunity cost is 12% annually, which of the following options should Penny choose?…

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CFP® Practice Question: What Would You Do if Laid Off?

THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Practice Question: Bob, age 47, has worked for XYZ Company the past 12 years.  XYZ Company has lost a major contract and must begin downsizing immediately.  Bob was…

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CFP® Practice Question: Calculating Education Expenses

THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Practice Question: Tammy wants to set aside a sum of money today that will be sufficient to pay for 4 years of college tuition.  The 4 tuition payments…

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CFP® Practice Question: Calculating Mortgage Payments

THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Colin Farrell has a gross annual income of $48,000.  The current interest rate for 30-year mortgages is 7%.  The house that Colin is considering has property taxes of…

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CFP® Practice Question: Financial Planning Process

THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: During the stage of the financial planning process requiring processing and analyzing information, the financial planner will undertake all the following actions, EXCEPT:  Evaluate current economic conditions relating…

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CFP® Practice Question: Understanding Portability

In giving a talk to a small audience on the topic of estate planning, someone asks you, as a financial planner, to provide some clarifying comments regarding the recent portability of the Applicable Exclusion Amount between spouses. You would be correct in making any of the following comments EXCEPT:  While the 2012 Tax Relief Act…

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CFP® Practice Question of the Week: Saving for a Future Purchase

Al wants to purchase a lake house in 20 years when he retires. The house currently costs $450,000 and inflation is 4%. As his certified financial planner, Al asks for your guidance in identifying how much he should save at the beginning of each year to accomplish his goal of purchasing the house with cash…

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CFP® Practice Question of the Week: Insurance

James is planning to insure his commercial policy. In looking over two quotes and comparing some of the policy language to his own personal policies, he has become very confused regarding the different types of deductibles. He asks you, as a certified financial planner, which of the following deductibles are typically used in commercial property…

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CFP® Practice Question of the Week: Must Know Tax Rules, Kiddie Tax

Your client Beauregard has a daughter named Constance, age 16. Constance qualifies as a dependent on Beauregard’s income tax return. She has a passion for broadcasting and earned $3,000 as a part-time announcer in a local radio station this year. Beauregard transferred $100,000 into a high yield bond fund for Constance last year. The bond…

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CFP® Practice Question of the Week: Financial Planning

Five years ago, John and Barbara, who are in their mid-50s and have one adult child out of college, experienced a sharp increase in income (ten times) within a two-year period. Their lifestyle and the complexity of their financial situation increased respectively. Their income statement’s bottom line increased and their assets/liabilities expanded as well (third…

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