CRPC EXAM ACTUAL EXAM 220+
QUESTIONS AND CORRECT DETAILED
ANSWERS | 2024 UPDATE | 100%
CORRECT GRADED A+
The Department of Labor requirements regarding advice given to retirement
investors will most likely - ✔✔✔ ANSWER INCREASE CLIENT EXPECTATIONS OF
ADVISERS AND PUT DOWNWARD PRESSURE ON FEES
If asking you to solve for an annuity due where payments occur at the beginning
of the period - ✔✔✔ ANSWER you would set calculator for BEG.
identifying specific funds in which to invest are discussed on? - ✔✔✔ ANSWER
Specific investments are not discussed until step four of the planning process,
when the planner develops and presents the retirement plan
The client's ability to purchase insurance or investments is reviewed - ✔✔✔
ANSWER in step three of the planning process, in which an analysis and
evaluation of financial status takes place.
During the data gathering process the planner should identify - ✔✔✔ ANSWER
the clients retirement account balances, income sources and amounts and
determine his or her risk tolerance.
Net worth is defined as - ✔✔✔ ANSWER assets minus liabilitie
Net cash flow is calculated by - ✔✔✔ ANSWER subtracting total cash outflows
from total cash inflows.
College funding is considered a - ✔✔✔ ANSWER a lifestyle goal
Foundation goals are those that - ✔✔✔ ANSWER contribute to more basic living
needs such as food, insurance, and emergency funds. The coverage of risk
exposures is also considered a foundation financial goal.
,You have completed all of the activities involved in the data gathering step of
thefinancial planning process, including obtaining sufficient quantitative
informationand documents. What is the next step of the process - ✔✔✔
ANSWER Analyzing and evaluating the client's information. Once you have
gathered all of the appropriate data needed, the next step is to analyze it.
With some exceptions, most categories of living expenses, such as
transportation,clothing, and housing - ✔✔✔ ANSWER decrease during
retirement years.
Some expenses may even increase during retirement years. - ✔✔✔ ANSWER
suchas travel and medical
It is true that Social Security benefits may? - ✔✔✔ ANSWER may increase for
people who work past their Social Security full retirement age. Additionally,
wages and salaries earned during retirement will obviously increase retirement
income.
longer life spans will result - ✔✔✔ ANSWER in a need for more retirement
income
If client retirement funds are insufficient to meet goals - ✔✔✔ ANSWER gifts to
children should decrease.
Delaying retirement - ✔✔✔ ANSWER will decrease the need for retirement
income.
When a client's funds are insufficient to attain retirement goals, it is appropriate
for the planner to suggest - ✔✔✔ ANSWER retiring later than initially planned,
performing part-time work during retirement, spending less and saving more
during retirement.
During retirement, CLIENT wants to receive $50,000 at the end of each year for
the rest of his life. To calculate the amount that she will need to save, you need
tosolve for - ✔✔✔ ANSWER ordinary annuity—set calculator at end. You do
need toset the calculator in END mode and solve for ordinary annuity.
If asked to solve for an annuity due (where payments occur at the beginning of
the period) - ✔✔✔ ANSWER you would set calculator for BEG.
, client wants to retire the 1st of next year. She wants to receive monthly
retirement income payments on the 1st day of each month. To solve the
amountof capital required to provide her the income she wants, you need to
solve for -
✔✔✔ ANSWER annuity due—set calculator at begin. you would need to solve
forannuity due, and set the calculator at begin.
When gathering data during the retirement planning process, financial goals
should be quantified in dollar amounts and which of the following - ✔✔✔
ANSWER established time frames
When saving on a level basis - ✔✔✔ ANSWER the inflation rate does not come
into play if the question notes on a level basis.
When assisting the client in establishing realistic goals, the planner - ✔✔✔
ANSWER should help define financial goals so that they are quantified in dollar
amounts and have established time frames instead of remaining general in
nature.
Goals may be organized based on - ✔✔✔ ANSWER type, ownership, and priority
but those are not ways of quantifying them and making them more specific.
by type of goal
A statement of financial position shows - ✔✔✔ ANSWER a client's net worth,
which is defined as assets minus liabilities, as of a specific date.
A cash flow statement shows - ✔✔✔ ANSWER a client's net cash flow or deficit
over a period of time usually one year.
Income replacement percentage is another name for - ✔✔✔ ANSWER
"replacement ratio" and is used as a rough guide in determining the amount of
income needed in retirement relative to pre-retirement income.
One of the purposes of lifelong wealth accumulation - ✔✔✔ ANSWER is to
provide for a comfortable retirement.
Industry standards typically consider expenses lasting beyond - ✔✔✔
ANSWER 1 year to be long-term liabilities.
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