Blog
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 than…
Appropriate Valuation Method
Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: An apartment building in downtown New York that Sam owns with three partners, each of whom wants…
CFP Board Establishes 501(c)(6) to Focus on Workforce Development
CFP® Board Updates The CFP Board announced in January that they have established a new 501(c)(6) to help achieve their strategic workforce development priorities. The end result will be a 501(c)(3) called the CFP Board Center for Financial Planning and a 501(c)(6) called the CFP Board of Standards. Why are they taking this action? The…
Dependent Care Assistance Plan
Course: Retirement PlanningLesson 9: Building Retirement Wealth by Maximizing Fringe Benefits Student Question: Is a Dependent Care Assistance Plan (DCAP) funded by an Flexible Spending Account the same thing as a Dependent Care FSA? If not, could you provide some additional info as to how the two would work together (could an individual utilize both…
Section 179 Expensing
Which of the following expenses can Vicki expense entirely under Section 179 expense assuming she meets all other requirements? $10,000 for a new coat of paint in the lobby and office. $20,000 for a new roof on the warehouse $30,000 for vacation $25,000 for new computers CLICK TO REVEAL ANSWER Expand D is the answer.…
Do You Really Need a Calculator for the CFP Board Exam?
Good to Know We’re financial professionals, right? So let’s analyze the question posed in this article’s title. The CFP Board exam (the exam) consists of 170 questions. Anecdotally, the average exam has from 8 to 12 calculation questions which rank from moderately difficult to highly difficult. It’s been said (but not by us!) that studying…
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.…
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…
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…