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Refinance Payment Calculation
Jim refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $450,000 at the time of the refinance and the interest rate is 6%? $923 $1,244 $1,412 $2,592 CLICK TO REVEAL ANSWER Expand B is the answer. Brandon pays his mortgage every two weeks which…
CFP Board Supports Expansion of Fiduciary Duty
CFP® Certificants in the News The Employee Retirement Investment Security Act of 1974 (ERISA) pioneered desperately needed reforms for employer provided retirement plans. As just one example of pre-ERISA abuses, some employers required lengthy vesting requirements and-in a flagrantly deplorable practice-terminated employees before they became vested to avoid paying pensions. Fifty years ago, ERISA rode…
Risk Premium versus Intrinsic Value
Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: After reading the following, I’m confused about the amount a participant is allowed to take out as a loan from a qualified plan. Would it be up to $50k of vested account balance or only up to $10k? Text states: As a general rule, a participant…
Basis on Sale of Gifted Stock
Which of the following individuals would typically qualify for accelerated death benefits under their term life insurance policy? Ida who is expected to die within 7 months from cancer. Jacob who is expected to die within 10 months from AIDS. Kay who is expected to die within 3 months from kidney failure. All of the…
CFP Board Announces 2023 Academic Research Colloquium Winners
CFP® Board Updates The CFP Board Center for Financial Planning held the 7th annual Academic Research Colloquium for financial planning and related disciplines. It was held December 7-8, 2023 at the Renaissance Arlington Capital View Hotel in Arlington, VA. The colloquium is an international meeting of researchers, practitioners, graduate students and leaders of the financial…
Vested versus Contingent Beneficiary
Course: Estate PlanningLesson 3: Understanding Trusts and Trust Documents Student Question: In the example, I would think Northwestern would have a future, contingent interest, as their interest is dependent upon the death of the wife. But the feedback tells me it’s a vested interest. Do we assume death is inevitable, and therefore not a contingent-worthy…
Reversion Tax
Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…
Artificial Intelligence in Insurance
Good to Know The promise of AI must be tempered by the responsibility for its use by insurance companies according to a guidance bulletin published December 4 by the National Association of Insurance Commissioners (NAIC). According NAIC Commissioner Birrane, “This initiative represents a collaborative effort to set clear expectations for state Departments of Insurance regarding…
Risk Premium versus Intrinsic Value
Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: 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: Current price…