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Early Retirees—Alternatives to Medicare, Part III
Good to Know This article is part III of a IV-part series to help early retirees make informed healthcare coverage choices for the years before they’re eligible for Medicare. In Part I, we peeled back the onion on faith-based medical cost-sharing ministries. In Part II, we illustrated how Affordable Care Act (ACA) Policies can help.…
Maximum Potential Gain On Long Call
What is the maximum potential gain for an investor who is long a call? It is limited to the amount paid for the option Capped by the exercise price It is equal to the loss of a similar short put position Unlimited CLICK TO REVEAL ANSWER Expand The correct answer is number 4. An investor…
Solving for Bond Yield
An investor bought a bond at par that matures in 10 years. The bond pays an annual coupon of $110 and the reinvestment rate is 7%. What is the realized compound yield of this bond? 7.23% 8.01% 9.67% 14.10% CLICK TO REVEAL ANSWER Expand C is the answer. One would anticipate a realized compound yield…
Early Retirees—Alternatives to Medicare, Part II
Good to Know This article is part II of a series to help early retirees make informed healthcare coverage choices for the years before they’re eligible for Medicare. Remember that the first article in this series described how faith-based medical cost-sharing ministries can offer cost-effective coverage for those clients willing to accept behavioral exclusions from…
Loan Impact on Basis in a Modified Endowment Contract
Course: Insurance PlanningLesson 15: Income Taxation of Life Insurance Student Question: Can you help me better understand the difference between policy basis in a normal policy and policy basis on a modified endowment contract. From the Coursework: But for MEC purposes, the basis is increased by any portion of loans that were considered taxable income…
Rental Property Like-Kind Exchange
William found someone to buy his rental property in Maine. Which of the following properties William would like to purchase as rental property would allow him to complete a like- kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…
401(k) Plans and Same-Sex Couples
CFP® Certificants in the News Financial planning for same-sex couples is as important as planning for opposite-sex couples according to CFP Board. For context, the Supreme Court’s 2015 decision in Obergefell gave same-sex couples the right to marry and, once married, to enjoy the same rights as opposite-sex married couples. However, the new rights generally…
Annual Return and Compounding
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board exam will require an annual, or other period for the answer.Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of…
Various Sources of Income
A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C corporation and an S corporation. The C corporation had net profits of $20,000, and the S corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…