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Maxing Out Defined Benefit Plans
Course: Retirement Planning Lesson 8: Fitting Deferred Compensation into the Retirement Plan Student Question: Curious as to why the net result is $525,000.00 and not $500,000.00. Wouldn’t 100% of her current year compensation be $500,000.00? Is it just that the Board decided to max out the limits of the DBP and the NQEBP so that’s…
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Odd Lot Theory
Which of the following tells the investor that the Odd Lot Theory indicates a bull market? The ratio of odd lot purchases to sales is constant. Odd lot sales exceed odd lot purchases. The ratio of odd lot purchases to sales reaches the resistance point. Odd lot purchases exceed odd lot sales. CLICK TO REVEAL…
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When Should You Claim Social Security Retirement Benefits?
Good to Know When will our universe stop expanding? What age should you claim Social Security Retirement benefits? For too many of us, these two questions are equally confounding. The author cannot help you with astronomical riddles but can illuminate some of the key factors that should inform your claiming age decision. This is the…
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SIPC Reimbursement
Course: Investment Planning Lesson 2: Securities Markets and the Fed Student Question: The coursework states that the SIPC will pay claims up to $500,000, but in Example 2, they only gave Bruce $350,000. Why is that? Thanks. Wesley Example 2 Bruce had $400,000 in cash and $100,000 in securities in his brokerage account. His broker/dealer…
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CFP® Certificants in the News: Dangerous Misconceptions About A CFP® Certificant’s Duty to Disclose Material Conflicts of Interest
CFP® Certificant in the News In our last blog, we illuminated CFP Board’s expectation that a certificant either avoid OR disclose and manage material conflicts of interest. That’s a simple instruction, right? Maybe or maybe not. It’s easy to confuse “material conflict of interest” as only sales-related compensation such as upfront commissions, deferred sales charges,…
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ADRs and Exchange Rate
Course: Investment Planning Lesson 4: International Equity Securities Student Question: Is it not true that ADRs eliminate currency risk because transactions are done in USD? Lafe Instructor Response: Great question Lafe. ADRs do not guarantee exchange rates; they merely exchange foreign currency to US$ as a convenience to ADR investors. Changes in the exchange rate…
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Practice Question: Correlation between International Stocks and T-Bills
What is the correlation in returns between international stocks and Treasury bills? Low Moderate High Perfectly negative CLICK TO REVEAL ANSWER A is the answer. The correlation in returns between international stocks and Treasury bills is typically slightly negative (slightly below zero), meaning the correlation in returns is low and often they will move in…
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Inflation in the Service Sector
Course: Fundamentals of Financial Planning Lesson 2: Economic Concepts and Consumer Protection Laws Student Question: I was really hoping I could get some sort of expanded reasoning on the below statement if possible, please. I am having a hard time wrapping my head around this for some reason. I tried to Google this and look…
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Practice Question: What is a 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…
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