Blog

Custodial Accounts and Tax Deferral

By Bruce Starks, CPA, CFP®

Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hi, I am referencing the “Key Information – Coordination with Tax Credits” section. When it says “custodial accounts do not provide income tax deferral,” is this to say that a donor will earn and pay income tax on money received that is then gifted to the beneficiary?Assuming the gift is less than $15,000 annually, there…

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Tightening the Money Supply

By Dan Madden, CFP®

Which of the following is a monetary policy that will tighten the money supply? Sell government securities Lower the discount rate Decrease government spending Increase taxes CLICK TO REVEAL ANSWER Expand A is the answer. Selling government securities is a monetary policy that will tighten the money supply as the cash used to purchase the…

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July 2020 CFP Board Exam Moved to September

By Dan Madden, CFP®

CFP® Board Updates On May 4, the CFP Board announced the July 2020 CFP Board Exam has been postponed to September. This was in response to the ongoing Covid-19 pandemic. The new pertinent dates are: Examination Period: September 22-29, 2020 Registration Opens: Already in Progress Registration Deadline: September 8, 2020 Early Bird Discount ($725 rate)…

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Risk Premium versus Intrinsic Value

By Bruce Starks, CPA, CFP®

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: Hello Bruce,   The first Review Exercise page in Lesson 5 – is Intrinsic Value the same as Risk Premium? Is that why we’re solving for P0 and not V (which is given)? The formula provided in the explanation confuses me. (question and answer from Review Exercise below) Review Exercise Question: Given the following information, what…

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Black-Scholes Option Valuation Model

By Dan Madden, CFP®

All of the following are correct about the impact of an increase in the single variable under the Black-Scholes Option Valuation Model EXCEPT: Market price has a positive impact on put options. Strike price has a positive impact on put options. Expiration time has a positive impact on call options Stock volatility has a positive…

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The Unlikely Banker – IRS CARES for Business Owners

By Bruce Starks, CPA, CFP®

Good to Know THE TREASURY DEPARTMENT PROVIDES MORE THAN SBA LOANS FOR BUSINESS WORKING CAPITAL SBA loans and the Paycheck Protection Program dominated the business headlines over the last few months. But several less-heralded provisions of the CARES Act go beyond recent headlines to shore up cash flows of struggling businesses, too. How? Liberalization of…

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Coverdell ESA versus 529

By Dan Madden, CFP®

Course: Fundamentals of Financial PlanningLesson 7: Educational Aid and Funding Calculation Student Question: So, is there ever any benefit to choosing a Coverdell ESA over a 529 Plan? It seems the big difference in the two is that the Coverdell has an AGI limit, so why would you just not always steer clients towards 529 Plans since they can be used across state borders? Stephanie Instructor Response: Hi…

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Using Jensen Performance Index

By Dan Madden, CFP®

Based on the Jensen performance index, which fund should the investor continue to hold given the following information?   FUND 1 FUND 2 Return on Portfolio 13% 17% Beta .95 1.02 Standard Deviation .18 .22 Risk-free rate of return is 7% Market return is 15% Fund 1 Fund 2 Both Fund 1 and 2 Neither Fund 1 nor 2 CLICK…

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CFP® Certificants in the News: Honesty is the Best Policy

By Bruce Starks, CPA, CFP®

“Honesty is the best policy.” –Sir Edwin Sandys, 1599 CFP Board reported automatic interim suspensions on several participants’ right to use the CFP® mark in its April 14, 2020, press release. The CFP Board suspensions were based upon investment license revocations by the State of California and FINRA. Assuming the allegations made by CFP Board are proven, a number of recently-disciplined CFP® certificants…

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