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Internal Rate of Return Calculation
Course: Fundamentals of Financial PlanningLesson 5b: Using the HP 10bII Calculator Student Question: In Example 2, the solution given has 6 years (including CF0) instead of 5. I believe the first year of Carl’s coin purchase should be CF0, but the fifth year – which includes a purchase and a sale – should be CF4.…
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OASDI Disability Income Benefits
Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…
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Making Sense of the Duty to Report Information to CFP Board
CFP® Certificants in the News Are CFP® Certificants obligated to report merely being charged with a felony or misdemeanor to CFP Board? How about being notified of a regulatory investigation or action? Read on to get the answers, based on CFP Board’s Duty to Report Information publication. Text in quotation marks is taken from this…
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Daily Compounding
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: Why is 360 used for compounded daily? Shouldn’t this be 365 days?? Instructor Response: 360 is used by most banks for two reasons:
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Defining a Stock Spread
Which of the following combinations correctly describes a spread? A combination of a short sale and a purchase of a call for the same stock A combination of buying and selling calls on the same stock with different expiration dates and exercise prices A combination of a put and a call on the same stock…
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Tax Tips for 2023
Good to Know If you saw twenty-two $100 bills lying on the sidewalk and could not determine who the money belonged to, would you scoop it up? If your answer to that question is yes, we have good news. That much or more in federal income tax savings for 2023 could be possible. Clients may…
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Understanding the Relationship Between Coupon Rates and Duration
Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: There is a question regarding duration that I continue to struggle with. Which of the following are true: Can you explain #1 and #3? Instructor Response: Thank you for your question. This can become a bit convoluted. Let’s unpack the word “duration” first. Duration is nothing more…
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Calculating Realized Compound Yield on a Bond
An investor bought a bond at par that matures in 15 years. The bond pays an annual coupon of $130 and the reinvestment rate is 9%. What is the realized compound yield of this bond? 11.05% 12.55% 13.00% 14.10% CLICK TO REVEAL ANSWER Expand A is the answer. One would anticipate a realized compound yield…
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CFP Establishing Competency Standards Commission
CFP® Board Updates The CFP Board has announced they will be forming a Competency Standards Commission in 2023. The purpose of the commission will be to review and evaluate the CFP Board’s competency requirements for Education, Examination, Experience, and Continuing Education. The commission will be comprised of volunteers selected from financial services firms, educators, certification…
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