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What Does Peanut Butter, Jelly, and a 32% Lifetime Social Security Bonus Have in Common?
Good to Know Age 66 Monthly Retirement Check1 $24,000 annual benefit Age 70 Monthly Retirement Check1 $31,680 Annual Benefit Which benefit would you choose? Getting more sounds great but there are two challenges that must be conquered: Challenges #1: Bridging the income gap We called this “making the peanut butter and the jelly come out…
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Unmarried Child Retirement Benefits
Course: Income Tax PlanningLesson 10: Social Security Student Question: Does the retired worker have to also be drawing on their Social Security benefits for the unmarried child of the retired worker to receive benefits? For instance, a 63-year-old man has a 13-year-old daughter and he is retired but not drawing his SS benefits yet? Melinda…
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Market Anomaly
Which of the following correctly identifies a market anomaly? Stocks with high P/E ratios outperform stocks with low P/E ratios. Stocks of small firms outperform stocks of large firms. Stocks rated “5” by Value Line outperform stocks rated “1”. Stocks followed by financial analysts outperform those that are neglected. CLICK TO REVEAL ANSWER Expand B…
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CFP® Certificants in the News: What Do the New Standards of Conduct Mean When Disclosing Conflicts of Interest?
CFP® Certificants in the News True or False? A CFP® certificant is allowed to have a material conflict of interest with a client when providing financial advice. Answer. The statement is conditionally true. A certificant can have a conflict of interest with a client as long as the conflict is fully disclosed, the client agrees…
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Time-Weighted vs Dollar-Weighted Return
Course: Investment Planning Lesson 14: Evaluating Portfolio Performance Student Question: For both the Treynor and Sharpe, part of the calculation involves using the average portfolio return (rp). In most examples, the average portfolio return is being given. However, if I need to calculate this in real life, do I use the dollar-weighted return (internal rate…
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Intrinsic Value of a Put
Shares of DAGER Corp sell for $25 per share and a client holds a put for DAGER shares with an exercise price of $29. The premium for the put was $3. What is the intrinsic value of the put? $0 $1 $3 $4 CLICK TO REVEAL ANSWER Expand D is the answer. The intrinsic value…
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IRS GIVES WIN TO INVESTMENT ADVISORY FEES IN A NONQUALIFIED ANNUITY
Good to Know We will take a very short break from our Social Security blog series with late-breaking news – potentially good news for advisors who charge only investment advisory fees. First, we’ll frame the issue then present the potentially good news. But before we frame the issue, let’s unpack the word “nonqualified” as it…
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Recognizing Income – Cash Basis
Course: Income Tax Planning Lesson 3: Accounting of Gross Income Student Question: The first example in “Recognizing Income” about not recognizing the check payment until it can actually be cashed seems contradictory to the CFP Board question below which states that income is included when a check is RECEIVED. Any clarification you can provide here? Thanks. Jay Coursework…
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Interest Rate Risk
Which of the following correctly describes interest rate risk? Interest payments will have less purchasing power in the future. Bond prices decrease as interest rates increase. Interest payments may not be paid if the issuer goes bankrupt. The bond may be called because interest rates have decreased. CLICK TO REVEAL ANSWER Expand B is the…
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