A - ANS Personal Financial Planning
a. is a collaborative process
b. is primarily needed by wealthy individuals
c. does not need monitoring if done correctly
d. involves only insurance, investment, and retirement planning
C - ANS Which one of the following is a correctly wr...
a. is a collaborative process
b. is primarily needed by wealthy individuals
c. does not need monitoring if done correctly
d. involves only insurance, investment, and retirement planning
C - ANS Which one of the following is a correctly written financial goal?
a. to set aside 10% of income for the purpose of replacing the automobile currently owned
b. to accumulate funds within the next 10 years for college expenses for a son
c. to accumulate $40,000 in five years for a house down payment
d. to invest $5,000 per year for retirement
C - ANS Asset categories that are appropriate for the client are determined in which one of
the following steps in the financial planning process?
a. Understanding the clients personal and financial circumstances
b. Analyzing the clients current course of action and potential alternate course of action
c. Developing the financial planning recommendations
d. Implementing the financial planning recommendations
B - ANS Kiara has accumulated $10,000 in a savings account over the last few years and
has earmarked that money as a down payment on a luxury boat. Her central air conditioner
breaks and requires $5,000 in repairs. Kiara is reluctant to spend the money in her savings
account to make the repairs because she wants to use that money for the boat down payment.
Instead, she puts the $5,000 repair charge on her credit card at an annual interest rate of 23%.
This is an example of which of these behaviors?
a. Confirmation bias
b. Mental accounting
c. Self- control bias
d. Conservation bias
,B - ANS When helping clients identify goals, financial planners should practice active
listening skills by engaging in all of these except
a. summarizing what the planner has heard
b. offering suggestions for goals
c. restating the clients goals
d. paraphrasing what the clients have said
A - ANS Which of the following financial goals is written correctly?
a. to accumulate $40,000 in seven years for a down payment on a house
b. To set aside 10% of income to replace a car
c. To invest $5,000 a year for retirement
d. To accumulate funds within the next 10 years for a child's college expenses
C - ANS During which of the following steps in the financial planning process is the current
yield from already-invested assets first identified?
a. Developing the financial planning recommendations
b. Implementing the financial planning recommendations
c. Understanding the client's personal and financial circumstances
d. Analyzing the client's current course of action and potential alternate course(s) of action
B - ANS Potential problems that might interfere with clients achieving their objectives are
identified in which of the following steps in the financial planning process?
a. Implementing the financial planning recommendations
b. Analyzing the client's current course of action and potential alternate course(s) of action
c. Understanding the client's personal and financial circumstances
d. Developing the financial planning recommendations
D - ANS Which of these would NOT be considered quantitative data?
a. Brokerage firm statements
b. Life insurance policies
c. Assets and liabilities
d. Health status
B - ANS Which of the following is something a financial planner would want to know when
creating a financial plan?
I- Insurance needs
II- Retirement income objectives
III- Acceptable investment strategies
, IV- Liquid assets available for emergencies
a. I, II, and III
b. I, II, III, and IV
c. I and II
d. III and IV
A - ANS Which of the seven steps of the financial planning process follows the
development of the financial planning recommendations?
a. Presenting the financial planning recommendations
b. Monitoring progress and updating
c. Analyzing the client's current course of action and potential alternate course(s) of action
d. Implementing the financial planning recommendations
A - ANS Which of these statements regarding financial planning is CORRECT?
A)
Data gathering for a financial planning engagement includes both quantitative and qualitative
data.
B)
When clients' circumstances change, the planner should return to the fourth step in the financial
planning process, developing the financial planning recommendations.
C)
The role of the financial planner during the implementation of the financial planning
recommendations is to select from the strategies identified.
D)
Most financial planners are paid by fees only.
D - ANS Which of the following is a well-written goal?
A)
To accumulate $10,000 for a new automobile
B)
To accumulate sufficient money for a down payment on a house in five years
C)
To make money in the stock market
D)
To accumulate $500,000, by starting to save today, for retirement in 20 years
C - ANS Limited resources is the main reason for
A)
analyzing goals.
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