CFP® Practice Question

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…

Frank carries an H0-3 policy with $400,000 of coverage and a $1,000 deductible. It would cost $600,000 to rebuild Frank’s house. How much will his insurance company pay on a $100,000 claim related to a fire that started in Frank’s kitchen? $79,000 $82,333 $83,333 $99,000 CLICK TO REVEAL ANSWER Expand B is the answer. Frank…

Olivia is a 25-year-old single mother with twin girls who just turned three. Olivia has worked for the last 5 years as an administrative assistant for a local law firm. Olivia’s firm provides her with a basic medical insurance policy and a split definition disability. Which of the following is the biggest risk exposure for…

Which of the following statements concerning insurance contracts is NOT correct? An insurance contract is bilateral because both the insurer and the insured make legally enforceable promises. In an insurance contract, the insurer has made legally enforceable promises for which it can be sued for breach of contract. Because property insurance contracts are personal, it…

Nancy recently received $250,000 from her mother’s life insurance policy. She wants to use a portion of the money to fund her son’s college education that currently costs $10,000 a year and she anticipates an 8% yearly increase. Nancy can earn 7% on her investments and the overall inflation rate is 3%. Nancy’s son will…

Brandon refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $250,000 at the time of the refinance and the interest rate is 5%? $619 $671 $1,336 $1,342 CLICK TO REVEAL ANSWER Expand A is the answer. Brandon pays his mortgage every two weeks, which…

During the year, Michelle paid down her car loan by $5,000 and her school loan by $3,000. She also contributed $5,000 cash from her checking account to an IRA. Michelle’s investment account grew by $10,000 during the year. How much did Michelle’s net worth increase for the year? $8,000 $13,000 $18,000 $23,000 CLICK TO REVEAL…

Chuck lost his job last year when his company moved their factory overseas. Chuck has been unable to find another job and had to file for a Chapter 7 bankruptcy. Which of the following debts can be discharged in the bankruptcy? $10,000 of rent he owes his landlord $20,000 of taxes he owes the IRS…

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 statements concerning potential disadvantages of S Corporations is (are) correct? (1)   If the business continues to produce losses after the start-up period, the shareholders’ basis in their stock might become exhausted and then additional losses would not be tax-deductible. (2)   The receipt of significant amounts of passive income by an S…