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Student Question of the Week: Interest Rate Sensitive Industries
Student Question from Grace R.Course: Investment Planning Student Question: Hi Dan! In the fundamental equity analysis discussion regarding sectors, it states that the Utilities sector is considered interest rate sensitive. Would you mind explaining how utilities are interest rate sensitive? Instructor Response: Hi Grace! Great to hear from you! And a very good question here.…
CFP® Practice Question: Differences Between Preferred Stock and Long-Term Bonds
Which of the following statements correctly describe differences between preferred stock and long-term bonds? (1) Preferred stock is more risky for the investor than long-term bonds issued by the same company. (2) The market price of preferred stock fluctuates more than the market price of long-term bonds. (3) Long-term bonds usually have a longer maturity…
Student Question of the Week: Maximum Bodily Injury Coverage
Student Question from Safiya J.Course: Insurance Planning Student Question: Hi Dan, I hope you are doing well! I have a question about Question #8 (SHOWN BELOW) – what does the $300,000 mean in the coverage amount? I thought that was the maximum bodily injury coverage, but I must not be understanding that because I’m not…
Why Become a CFP® Certificant?
The Financial Planning profession is expected to grow dramatically in the near term according to a recent CFP Board newsletter. The Board expects the need for personal financial advisors to shoot up by some 41% in the near term and continue leading the average occupation growth through 2020. If you are currently practicing as a…
Student Question of the Week: The Applicable Exclusion Amount
Student Question from Andy MCourse: Estate Tax Planning Student Question: A correct response to a question in the textbook reads, “If an individual does not use the Unified Credit, it cannot be TRANSFERRED to others for their use.” Although the 2014 Unified Credit of $2,081,800 is not the same as the $5,340,000 Applicable Exclusion Amount,…
Student Question of the Week: Buy-Sell Agreements
Student Question from Holly SCourse: Income Tax Planning Student Question: Hi Dan. On this page, step 6 of the Stock Redemption steps seems incorrect. My understanding from a prior lesson was that the remaining owner % would be unchanged (stay at 33% in this example) since the corporation bought the deceased owner’s shares. What am…
Student Question of the Week: Emergency Fund
Student Question from Sophie LCourse: Fundamentals of Financial Planning Student Question: Hi Dan, The adequate amount for an Emergency Fund is 3 months for married clients who both have substantial and reliable income. What is the generally accepted level, if any, for “substantial income”? In Question 3, I considered that $60,000 per spouse was not…
Bipartisan Solutions for America’s Broken Tax Code
Congressman Dave Camp (R-MI), Chairman of the powerful Ways and Means Committee, recently released draft legislation dubbed The Tax Reform Act of 2014 (TRA 2014). TRA 2014 aims at job growth, a simpler and fairer tax code, and putting more hard-earned income back into the hands of taxpayers. Laudable goals all, but the bigger news…
Student Question of the Week: Ownership of EE Bonds
Student Question from Pam FCourse: Fundamentals of Financial Planning Student Question: Hello, My question deals with a situation where a grandparent buys EE bonds for a grandchild and both the grandparent’s name and the grandchild’s name are listed as owners on the bonds. In that situation, would the bonds be counted as the child’s asset…