CFP® Practice Question

Which of the following individuals need to register with the SEC under the Investment Advisers Act of 1940? Adam who retired last year from a big brokerage house but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda who writes weekly investment articles for…

Which of the following individuals currently covered by Medicare Part A will not have any of their expenses covered by Medicare Part A? Evan who spent one week in hospice care before losing his battle with cancer. Felicia who was treated by her doctor for Strep throat. Greg who was needed a walker following hip…

In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…

Which of the following individuals currently covered by Medicare Part A will not have any of their expenses covered by Medicare Part A? Evan who spent one week in hospice care before losing his battle with cancer. Felicia who was treated by her doctor for Strep throat. Greg who was needed a walker following hip…

Terry received a notice from the IRS correcting a math error on his individual income tax return. As a  result, Terry owes $1,000 in taxes,   penalties and interest. Which of the following is the most likely penalty or interest assessed against Terry? Understatement penalty Failure to file penalty Fraud penalty Underpayment penalty CLICK TO REVEAL ANSWER Expand D is the answer.…

Based on the Jensen performance index, which fund should the investor continue to hold given the following information? Fund 1 Fund 2 Return on Portfolio 13% 17% Beta .95 1.02 Standard Deviation .18 .22 Risk free rate of return is 7% Market return is 15% Fund 1 Fund 2 Both Fund 1 and 2 Neither…

William found someone to buy his rental property in Maine. Which of the following properties that William would like to purchase as rental property would allow him to complete a like-kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…

Dale refinanced his home mortgage to a 30 year fixed mortgage with biweekly payments. How much is each payment if he owed $350,000 at the time of the refinance and the interest rate is 3%? $680 $771 $1,136 $1,242 CLICK TO REVEAL ANSWER Expand A is the answer. Brandon pays his mortgage every two weeks…

Darryl Owens will report an AGI of $100,000 for this year on his federal income tax return. Darryl would like to make a gift to the local hospital of some stock. He would like to donate the stock that will provide the greatest income tax deduction for this year. Which of the following stocks should…