Student Question

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:…

Course: Insurance Planning Lesson: 17 – Business Uses of Life and Disability Insurance Student Question: Under the Stock Redemption Method – how is basis treated specifically to stock remaining outstanding (not Treasury stock) and how does this compare to the Cross Purchase Method? Is basis treated the same – do both methods provide the same…

Course: Estate Planning Lesson 7: Transfer Taxation IV – Generation Skipping Transfers Student Question: Wouldn’t Ellen be a non-skip person since Jane is deceased and she bumps up the ladder one step to be just one generation behind?? (See question below in which Ellen is identified as a skip person.) Question 1: The following chart shows the…

Student Question: Course: Investment Planning Lesson 9: Fixed Income Securities I don’t clearly understand how money is made in the mortgage-backed bond process.  What are mortgage pools? Does the investor make money from the interest of the pooled mortgages? What if the mortgages default? Thanks, Kevin Instructor Response: Great question.  Here’s a quick example: John Doe…

Course: Income Tax Planning Lesson 8: Arriving at Taxable Income Student Question: Hi – I know that the Miscellaneous Deduction has been suspended; therefore, reimbursed employee mileage is no longer deductible. Can individuals still deduct mileage related to medical and charitable travel? If so, how is this deduction taken? Thanks! Justin P Instructor Response: Hi Justin, Good question…

Student Question from AlisonCourse: Investment Planning Student Question: Can you help explain this question better? If the market risk premium were to increase, doesn’t that mean the amount of compensation and investor desires would increase, so the value of stock would need to increase further? Board Released Question If the market risk premium were to increase, the value…

Student Question from KrishnaCourse: Insurance Planning Student Question: I think I’m missing something w/this concept. I don’t understand how life insurance proceeds would be taxable to the owner’s estate when the beneficiary is someone else? Example: If I am the policy owner and I purchase life insurance on myself and name my sister as the…

Student Question from David MCourse: Estate Planning Student Question: Hi Dan! Why is Hillary a non skip person in question 1 when she is the granddaughter of Sam and Sarah Parker? Instructor Response: Hi David! Good example of where to be careful on CFP Board exams.  While the diagram shows Sam and Sarah at the…