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Information Ratio
Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello, In calculating Information Ratio, why do we need the denominator to be Standard Deviation of the difference in portfolio and index returns? This is unlike the Sharpe Ratio, where the denominator is Standard Deviation of the Portfolio. Doesn’t the Standard Deviation of the Portfolio indicate…
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Section 303 Redemption
A Sec. 303 Redemption is most likely appropriate for which of the following estates? At Fred’s death, Fred owned all of his assets, including the stock of a closely-held corporation in joint tenancy WROS with his wife. Before Gloria’s death, she transferred all of her assets, including the stock, in a closely-held corporation to an…
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CFP Board Registered Programs Conference
CFP Board Updates The CFP Board Registered Programs Conference took place December 15-16, 2020. The conference is an annual gathering of financial planning educators, thought leaders, financial service professionals, and the CFP Board. For registered programs, it provides an opportunity to network with other schools and learn valuable updates from the CFP Board. This year’s…
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Skewness versus Kurtosis
Course: Investment PlanningLesson 13: Asset Allocation Student Question: Hi, Can you help me understand the difference between Kurtosis and Skewness? I can’t quite piece it together. Thanks, Meg Instructor Response: Hi Meg, Entire books have been written on this topic, but the following summary should get the points for you on the CFP Board Exam…
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Calculating Monthly Retirement Benefit
Savanna’s PIA amount is $800. If her full retirement age is 67 and she decides to start taking Social Security benefits at age 64, what is the amount of her monthly benefit? $400 $560 $640 $800 CLICK TO REVEAL ANSWER Expand C is the answer. Savanna will have a 20% reduction in benefits for taking…
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Good to Know: Environment, Social, and Governance (ESG) Investing in Employer-Sponsored Retirement Plans
Good to Know We look to a highly respected source – The National Law Review1 – to help clarify confusion over ESG (Environmental, Social, Governance) investing issues in employer-sponsored retirement plans. Specially, we focus upon The National Law Review’s commentary on these issues: An overview of the final rule, Key requirements of the final rule,…
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Book Value versus Market Cap
Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: Hi, How is a company’s book value different from the market cap? Thanks, Anibal Instructor Response: Hi Anibal, Book value is an accounting concept generally based upon the acquisition costs of and the legally binding amounts of liabilities. It is the amount of cash that would…
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Taxation on Resale of Property
George Sloan sold farmland valued at $200,000 to his son Frank. Frank paid $40,000 at closing and signed an installment obligation for the remainder of the purchase price to be paid over ten years at 10% interest on the outstanding balance. If Frank sells the property to a second purchaser for $210,000 cash 20 months…
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CFP Board’s Code and Standards vs. SEC’s Reg BI
CFP® Certificants in the News CFP Board published “What You Need to Know About CFP Board’s Code and Standards and Reg BI” on August 17, 2020; we will address the following questions with direct quotes from CFP Board’s publication: Does Reg BI apply to CFP® Certificants? How do the standards of conduct differ? How do…
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