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CFP® Practice Question: Includible in Gross Income?
Which of the following is includible in gross income for federal income tax purposes? A. Gift from a grandfather to pay tuition B. A year-end bonus received by an employee, based on business profits C. Excess living expenses received under an insurance contract after a home was damaged by fire D. Interest paid on most…
CFP® Practice Question: Taxation at Parents’ Marginal Rate
Jennifer and Ben have been extremely successful in transferring some of their money to their children over the past several years. The following events took place in the current year: Jan, age 13, earned $1,300 in interest. Bill, age 20 and NOT a student, earned $2,500 in dividends, interest, and capital gains and $1,800 working…
CFP® Practice Question: Inherited Property
Three years prior to Matthew’s death, he inherited property that was taxed in his father’s estate. What percent credit would Matthew receive on this inherited property in his own estate? A. 100% B. 80% C. 60% D. 40% E. 0% CLICK TO REVEAL ANSWER Correct answer is B. Full credit is allowed if the death…
CFP® Practice Question: Reasons for Writing a Covered Call
Which of the following are logical reasons for writing a covered call? (1) To profit when stock prices increase (2) To utilize leverage (3) To provide additional income in a flat market (4) To provide additional gain while disposing of a long stock position A. (1) only B. (1) and (3) only C. (1), (2),…
Student Question of the Week: Skip versus Non-Skip Person
Student Question from David MCourse: Estate Planning Student Question: Hi Dan! Why is Hillary a non skip person in question 1 when she is the granddaughter of Sam and Sarah Parker? Instructor Response: Hi David! Good example of where to be careful on CFP Board exams. While the diagram shows Sam and Sarah at the…
CFP® Practice Question: Duration
Which of the following statements correctly describes duration? A. There is a positive relationship between the coupon rate and duration. B. There is an inverse relationship between the yield to maturity and duration. C. Bonds with shorter durations are more volatile. D. There is an inverse relationship between maturity and duration. CLICK TO REVEAL ANSWER…
New February Start Date for the Instructor-Led CFP® Certification Education Online Program
Greene Consulting, a leading financial services education and consulting firm, and the University of Georgia’s Terry College of Business, one of the top business schools in the country, announces a new start date for the next Live Instructor-Led Certified Financial Planner™ Certification Education Online class. The next class begins on Wednesday, February 24, 2016, at…
CFP® Practice Question: How Much Would you Pay for this Bond?
Bill asks you to price a zero-coupon bond that matures in seven years for $1,000. Bonds with similar risk and maturity yield 10.5%. What is a fair price for Bill to pay for this bond? $473 $481 $489 $497 CLICK TO REVEAL ANSWER The correct answer is C. TI BA-II Plus HP-12C 7, x,…
CFP® Practice Question: Which Portfolio Would You Choose?
Portfolio X has a weighted beta coefficient of 1.5, and Portfolio Y has a weighted beta coefficient of .8. Both portfolios are expected to earn the same weighted-average expected return. With these assumptions, which of the following statements is correct? An investor should choose Portfolio X because of its higher beta. An investor should choose…