Questions of the Week

Course: Retirement Planning Lesson 4: Understanding Types of Qualified Plans Student Question: Hi Bruce- I have studied the material in depth, but am still struggling with the distinction between Money Purchase Plans, Cash Balance Plans, and Target Benefit Plans. I have read all of the notes and think I have it and then get a…

Course: Retirement Planning Lesson 1: Using IRAs to Build and Distribute More Retirement Income Student Question: Hi Bruce- If an IRA owner over-contributes to his IRA, the owner must remove the excess contribution AND the earning on those contributions by the tax filing  date to avoid a 6% tax penalty. However, the 6% penalty tax…

Course: Income Tax Planning Lesson 1: Introduction to Taxation Student Question: Hi Dan- I have a question on Review Exercise #1 (below) Review ExerciseShane’s tax return was due on April 15. He filed on April 15 but did not pay his $125 tax bill until May 11. How much, if any, will Shane be penalized?…

Course: Investment Planning Lesson 9: Equity Securities Student Question: Greetings Dan, I am in the Investment Planning course, on Topic 36.  In the sample questions that ask to determine bond yields, how do I determine the value for the end of period payment? For example, refer to Page 36.11, the practice question gives $37.50 as…

Course: Investment Planning Lesson 14: Evaluating Portfolio Performance Student Question: I’ve seen this question come up a couple times, but can’t seem to grasp the answer. “If the Market Risk Premium were to increase, all other things being equal, the value of common stock would…” The answer is “decrease”, but that makes no sense to…

Course: Investment Planning Lesson 14: Evaluating Portfolio Performance Student Question: Hello! Re: Reverse Splits: When companies decide to do a reverse stock split, does the company always take in the outstanding shares as “treasury stock”? If not, what happens to the outstanding stock that has been taken away? Where does it go on the balance…

Course: Fundamentals of Financial Planning Lesson 5: Using the HP12-C Calculator Student Question: Hi, how do i know when to use CHS in the calculator, I’m a little unclear about  that. Instructor Response: Hi Julio- Good to hear from you.  Hope all is going well thus far. Yeah, this can certainly be confusing.  There are some…

Course: Investment Planning Lesson 3: Equity Securities Student Question: I’m having trouble following the math on the example (shown below) at the bottom of the page. Could you please walk through the calculations? I understand how the initial margin with cash amount is calculated, but it gets a bit fuzzy for me after that. Example…

Course: Income Tax Planning Lesson 4: Calculating Total Income Student Question: So, if I’m understanding this correctly, alimony recapture should no longer be an issue in 2019 and beyond due to alimony no longer being deductible, correct? Instructor Response: Hi Lafe, Good question. Alimony paid under a divorce decree executed before 1/1/19 will continue to…

Course: Investment Planning Lesson 1: Key Principles of Investing Student Question: Hi Dan- I don’t understand why this statement is true: “Beta is a measure of systematic, non-diversifiable risk.” I thought Beta was a measure ofrelative volatility? This is from a Board-Related Question in “Measures of Investment Risk” in “Principles of Investing”. Craig Instructor Response:…