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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 return on Investment 2, made 3 years…
ESOPs and Stock Bonus Plans
Which of the following statements concerning the characteristics of ESOPs and stock bonus plans is correct? The employer is required to make a specific annual contribution. Non-vested account balances of terminated participants are usually reallocated to the remaining participants. The employer assumes the risk associated with the investment of trust fund assets. The increased investment…
FAQs – Remaining CFP Board Exams in 2020
CFP Board Exam FAQs The questions surrounding CFP Board’s response to COVID-19 number in the dozens if not hundreds. In this blog, we’ll identify key FAQs on the subject. Is there an additional fee to register for the September Exam? Candidates who were registered to take the exam in July will be able to reschedule…
Tax-Deferred versus Tax-Free
Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hello Dan, I’m working through some of the educational savings vehicles and I see the term tax-deferred and tax-free. But what does each mean? Investment grows tax-deferred. I understand deferred is to pay later, right? My understanding is that it means one does not pay taxes for investment growth. So why is…
Defined Benefit Plan Reversion Tax
Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…
SEC Regulation Best Interest – Who is Protected and When?
Good to Know The Security and Exchange Commission’s Regulation Best Interest (Reg BI) is aimed squarely at protecting the best interests of retail investors. A common issue that arises is exactly when Reg BI applies. The short answer is that Reg BI applies when a retail customer receives and subsequently uses a recommendation from a…
Custodial Accounts and Tax Deferral
Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hi, I am referencing the “Key Information – Coordination with Tax Credits” section. When it says “custodial accounts do not provide income tax deferral,” is this to say that a donor will earn and pay income tax on money received that is then gifted to the beneficiary?Assuming the gift is less than $15,000 annually, there…
Tightening the Money Supply
Which of the following is a monetary policy that will tighten the money supply? Sell government securities Lower the discount rate Decrease government spending Increase taxes CLICK TO REVEAL ANSWER Expand A is the answer. Selling government securities is a monetary policy that will tighten the money supply as the cash used to purchase the…
July 2020 CFP Board Exam Moved to September
CFP® Board Updates On May 4, the CFP Board announced the July 2020 CFP Board Exam has been postponed to September. This was in response to the ongoing Covid-19 pandemic. The new pertinent dates are: Examination Period: September 22-29, 2020 Registration Opens: Already in Progress Registration Deadline: September 8, 2020 Early Bird Discount ($725 rate)…