Blog

Skewness versus Kurtosis

By Bruce Starks, CPA, CFP®

Course: Investment PlanningLesson 13: Asset Allocation Student Question: Hi, Can you help me understand the difference between Kurtosis and Skewness?  I can’t quite piece it together. Thanks, Meg Instructor Response: Hi Meg,Entire books have been written on this topic, but the following summary should get the points for you on the CFP Board Exam when…

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Calculating Monthly Retirement Benefit

By Dan Madden, CFP®

Savanna’s PIA amount is $800. If her full retirement age is 67 and she decides to start taking Social Security benefits at age 64, what is the amount of her monthly benefit? $400 $560 $640 $800 CLICK TO REVEAL ANSWER Expand C is the answer. Savanna will have a 20% reduction in benefits for taking…

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Good to Know: Environment, Social, and Governance (ESG) Investing in Employer-Sponsored Retirement Plans

By Bruce Starks, CPA, CFP®

Good to Know We look to a highly respected source – The National Law Review1 – to help clarify confusion over ESG (Environmental, Social, Governance) investing issues in employer-sponsored retirement plans. Specially, we focus upon The National Law Review’s commentary on these issues: An overview of the final rule, Key requirements of the final rule,…

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Book Value versus Market Cap

By Bruce Starks, CPA, CFP®

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: Hi, How is a company’s book value different from the market cap? Thanks, Anibal Instructor Response: Hi Anibal, Book value is an accounting concept generally based upon the acquisition costs of and the legally binding amounts of liabilities.  It is the amount of cash that would…

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Taxation on Resale of Property

By Dan Madden, CFP®

George Sloan sold farmland valued at $200,000 to his son Frank.  Frank paid $40,000 at closing and signed an installment obligation for the remainder of the purchase price to be paid over ten years at 10% interest on the outstanding balance. If Frank sells the property to a second purchaser for $210,000 cash 20 months…

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CFP Board’s Code and Standards vs. SEC’s Reg BI

By Bruce Starks, CPA, CFP®

CFP® Certificants in the News CFP Board published “What You Need to Know About CFP Board’s Code and Standards and Reg BI” on August 17, 2020; we will address the following questions with direct quotes from CFP Board’s publication: Does Reg BI apply to CFP® Certificants? How do the standards of conduct differ? How do…

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Capital Versus Security Market Line

By Bruce Starks, CPA, CFP®

Course: Investment PlanningLesson 13: Asset Allocation Student Question: Hi, Could you help me better understand the difference between the capital market line (CML) and security market line (SML)?  I can’t seem to fully grasp the difference. Thanks, Meg Instructor Response: Hi Meg, First, let’s take a full step back for perspective.  The SML and CML…

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Characteristics of a Will

By Dan Madden, CFP®

Which of the following statements concerning a Will are correct? A will can be altered, amended, or completely rewritten at any time before a person’s death. A will cannot be rewritten but can be amended at any time by a codicil. A will must be signed by the maker and usually must be witnessed by…

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SEP IRA Contribution Limits

By Bruce Starks, CPA, CFP®

Course: Retirement PlanningLesson 5: Leveraging Nonqualified Plans for Small Business and Not-For-Profit Employees and Owners Student Question: Hello! I am wondering why on this page it says the contribution to a SEP IRA is the lesser of 25% covered compensation or $57,000 (2020), but then it says the combined contribution for SEP IRA and qualified…

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