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CFP® Practice Question of the Week: Income Planning
A 56-year-old client becomes unemployed due to disability. The client tells a CFP® professional that he hopes to go back to work eventually, but is not sure when that might be. Until then, he needs to generate replacement income. His only available asset is his traditional 401(k) plan. What is the best way for the…
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Student Question of the Week: Financial Planning
Student Question from: Shannon P.Course: Fundamentals of Financial Planning – Economic Concepts Student Question: I need a better understanding of the relationship between supply and demand, in particular the equilibrium price. Instructor Response: Hi Shannon! The short of it is that the equilibrium price is the point at which the demand for a good meets…
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CFP® Practice Question of the Week: Financial Planning
A client has a $1,200,000 portfolio consisting of the following four stocks: $300,000 ABC @ 1.1 beta $225,000 RTR @ 0.7 beta $405,000 XYZ @ 0.3 beta $270,000 PDQ @ 1.3 beta What is the beta of the portfolio as a whole? 0.8 0.85 0.91 1.0 CLICK TO REVEAL ANSWER This question appeared on…
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Student Question of the Week: Financial Planning
Student Question from: David L.Course: Fundamentals of Financial Planning – Using the Calculator Student Question: Dan – I’m not understanding Question #4. Why is 1 used as the present value? And then why 1 x 12? From the Lesson: 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7%…
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CFP® Practice Question of the Week: Social Security
Ron and his wife Susan, both 61 years of age, ask a CFP® professional to provide a recommendation on whether or not Susan should start to draw Social Security benefits when she first becomes eligible at age 62. Which of the following would be the least important to obtain in order to provide a recommendation?…
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Student Question of the Week: Retirement Planning
Student Question from: SteveCourse: Retirement Planning – SEP Employer Contributions Student Question: Dan, should the second paragraph below say, “…the lesser of 100% of covered compensation…”, and NOT 25%? Thanks! While the funding amount can be at the sponsor’s discretion, the actual contribution structure is inflexible and is generally a uniform percentage of compensation. …
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Student Question of the Week: Retirement Planning
Student Question from: Natalia G.Course: Retirement Planning – Characteristics of ESOPs Student Question: Quick question – under “Recognition deferral” paragraph (below in bold), it is stated that ESOP plan participants can “defer recognition of a portion of their gains when employer securities are distributed at retirement. Participants are generally eligible to delay recognition of gain…
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CFP® Practice Question of the Week: Mortgage
A CFP® professional meets with two new clients who would like advice about their mortgage. In the review, the CFP® professional finds that their essential expenses exceed their income. Mortgage rates have come down significantly and they intend to refinance their current 30-year mortgage to a 15-year mortgage. Their payments will be higher than their current payment.…
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CFP® Practice Question of the Week: Retirement
During an annual review with Anna and Lawrence Harvey, a CFP® professional discusses their retirement objectives. Because of weak market performance over the past few years, it appears that they are no longer on track for retirement. How should the CFP® professional best direct discussion of this situation? Tell the Harveys that they must increase their monthly…
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