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Exam (elaborations)

CTFA - Financial Planning Questions & Answers Correct!!

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Asset Allocation should conform to an individual's _____________ - ANSWERSrisk tolerance A springing durable power of attorney is effective only on a _____________________ - ANSWERSconditional event What is the minimum age for receiving Social Security benefits? - ANSWERS62 Assume Greg inh...

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  • October 3, 2024
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • CTFA
  • CTFA
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CTFA - Financial Planning Questions &
Answers Correct!!
Asset Allocation should conform to an individual's _____________ - ANSWERSrisk
tolerance

A springing durable power of attorney is effective only on a _____________________ -
ANSWERSconditional event

What is the minimum age for receiving Social Security benefits? - ANSWERS62

Assume Greg inherits stock from his father that he purchased at $50 per share and it
appreciated to $75 per share by the date of his father's death. At the time the estate
settled one year later, the stock had declined to $65 per share. What was Greg's tax
basis in the stock - ANSWERS$75

Disability benefits have a ______________ elimination period - ANSWERS6 month

When is disability insurance benefit not taxable to the insured? - ANSWERSWith an
individual plan - where the insured pays the premium with after tax dollars

Are distributions from a 529 plan for educational purposes tax-exempt? -
ANSWERSYES

The present value of an amount to be received in the future is always __________ than
the nominal future value. - ANSWERSLOWER

In order to receive the highest monthly pension payment, a retiree should chose a
______________ payment option. - ANSWERSSingle Life

IRA distributions prior to age __________ are generally subject to an excise tax. -
ANSWERS59 1/2

Can you afford to retire if investment capital is exhausted and future expenses exceed
available income? - ANSWERSNOOOOOOOO

Medigap plans - ANSWERSA supplemental benefit plan meant to cover gaps in
Medicare coverage, such as supplementing the payment of bills to physicians

Is the cash value portion of a life insurance policy considered part of your net worth? -
ANSWERSYes

, Are damages that might be received from a lawsuit currently being litigated considered
part of your net worth? - ANSWERSNO

T/F: In regards to a marital deduction trust, the surviving spouse has the unrestricted
right to receive income? - ANSWERSTrue

Seven-Pay Test - ANSWERSThe IRS guidelines that determine if a policy is classified
as insurance or an investment product. Government imposes mandated guidelines
regarding premium amounts to stay under to be considered insurance

The main concern with the use of home equity lines of credit for financing consumer
purchases is... - ANSWERSdoing so places ownership of the home at risk

____________ funds provide safety of principal - ANSWERSMoney Market Funds

The most important factor in assuring the adequacy of assets in retirement is to -
ANSWERSLimit spending to the amount supported by income and assets

The purpose of the valuation discount in a family limited partnership or LLC is for... -
ANSWERSFederal gift and estate tax purposes

The regular federal income tax liability is calculated by multiplying the appropriate tax
rate by... - ANSWERStaxable income

A beneficiary of an IRA must be designated by.... - ANSWERSSeptember 30th of the
year following the year of the IRA owner's death

Waiver of Premium rider - ANSWERSThe premium will be waived after the insured has
been disabled for a stated period of time

Whole Life Policy - ANSWERSthe most popular type of life insurance. The insured
person pays the same premium each year of his or her life (hence the term "whole life")
or until some specified age.

Universal Life Policy - ANSWERSTerm life insurance with a cash value.

Allows for partial surrender/cash withdrawal not treated as a loan. Does not reduce
Face Amount only reduces cash account if repaid later treated like a Premium payment

Variable Life Insurance - ANSWERSInvestment plan that resembles an investment
portfolio. Lets policyholder choose among a broad range of investments

is a fixed-premium policy in which the death benefit and cash values vary according to
the investment experience of a separate account maintained by the insurer

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