Chartered Financial Consultant Examination

1.Before Maya shares account statements, she and the planner agree on what the work will cover and how they will work together. Which planning step is that?

2.Leo's plan was put in place last spring. He has since changed jobs, and his expenses are higher. What should the planner do at this point?

3.Maya owns assets worth $400,000 and owes liabilities of $150,000. What is her net worth?

4.Leo receives $8,000 a month and spends $6,200 a month. What is his monthly cash-flow surplus?

5.Nora wants money she can spend if her paycheck stops for a few months. Which resource matches that job?

6.Owen's house could burn, and he cannot bear that loss himself. Why would the planner bring insurance into the plan?

7.Grace is paid a salary only when she can work. She wants income if illness keeps her off the job for many months. Which coverage fits?

8.Luis may need paid help with bathing, dressing, and meals for several years. Which coverage is aimed at that need?

9.A covered fire could damage Anita's furniture and appliances in her home. Which statement belongs in her plan?

10.Beth wants a holding that gives her an ownership stake in a company. Which choice matches?

11.Carl wants to lend money to an issuer and hold the issuer's promise to pay him back. Which holding matches?

12.Diane is comparing the cash in her plan with her stocks and bonds. Which description of that cash is sound?

13.Evan's savings sit in one company, and a failure of that company would wreck the account. What is the point of spreading the money?

14.Farah's planner sets a target mix of stocks, bonds, and cash before choosing individual holdings. What is that mix called?

15.George owns many stocks, but every one of them trades in the same market. Which risk is still present?

16.Hana's employer plan uses pay and years of service in a formula and promises the result of that formula. What kind of plan is it?

17.Ivan's employer puts a set contribution into an account, and Ivan's balance moves with the investments. Which statement fits this plan?

18.Jill's plan says she now owns part of the employer-funded benefit and would keep that part if she left. What is that ownership called?

19.Ken's plan document, and only that document, allows him to defer up to $6,000 this year. He defers $6,000. What did he follow?

20.Lila wants savings aimed at her son's future education expenses. Which arrangement matches?

21.A family agreement says they will put no more than $4,000 into a 529 plan this year, and they save $4,000. Which statement is correct?

22.Mark has wages and also a profit on stock he held for several years. Which tax principle should his planner use?

23.Which description matches a progressive income tax?

24.Omar wants tax guidance that does not depend on memorizing this year's bracket table. Which statement stays sound?

25.Ruth signs a document that says who receives her probate property when she dies. What does that document do?

26.Theo's trust document tells the trustee how to hold and pay out the property inside the trust. What can that trust do?

27.Uma's life policy names her child as beneficiary. Her will leaves the residue to her sibling. Who receives the policy proceeds?

28.Wes leaves property to his spouse in a way that qualifies for the marital deduction. What can that deduction do?

29.Yara asks which estate figure she should memorize as permanent national law. Which item should the planner refuse to treat that way?

30.In a fiduciary engagement, two products could fill Zack's need, and one pays the planner more. What must the planner do?

31.A client hears that anyone who sells a financial product owes a fiduciary duty in every sale. Which reply is accurate?

32.Next month's rent is $3,000. The client has $3,000 of cash and no other liquid money. Which recommendation is unsuitable?

33.Which act is a misrepresentation to a client?

34.The engagement letter is signed, but the planner still does not know the client's goals, assets, or spending. Which step comes next?

35.The planner now has the client's goals, a net-worth statement, and a cash-flow statement. Which step uses those facts to find gaps?

36.Analysis shows the client's savings will not meet a stated retirement goal. Which step comes next?

37.The client accepts a written recommendation to raise cash savings and buy property insurance. Which step carries out that choice?

38.Assets are $220,000 and liabilities are $70,000. What is the net worth?

39.Annual income is $90,000 and annual expenses are $72,000. What is the annual cash-flow surplus?

40.The client may be out of work for two months and must still buy food and pay rent. Which use of cash matches an emergency fund?

41.A single sum of $5,000 earns simple interest of 8 percent for one year, with no compounding. What is the future value?

42.$10,000 grows at 10 percent for one year with annual compounding. What is the future value?

43.$20,000 earns simple interest of 5 percent per year for two years, with no compounding. What is the future value?

44.Sam is paid only for the hours he teaches. A long illness would stop that pay. Which coverage replaces part of his earned income?

45.Helen wants a way to pay for extended help with daily living if she needs that help for years. Which tool matches?

46.A fire could destroy the client's house, and the client wants that property loss transferred. Which coverage fits?

47.The client can bear a small loss but not the loss of the whole house. What is the planning use of insurance here?

48.The client says, I want to own part of a company, not lend the company money. Which holding fits that request?

49.The client says, I want to be a lender to an issuer, not an owner. Which holding fits that request?

50.The planner keeps a cash sleeve for a client who may need money on short notice. Why does cash fill that role in the mix?

51.A portfolio is 100 percent one company. The planner adds a second company in another industry. What improved?

52.Ten technology stocks that all trade in the same market fall sharply in the same month. What does that pattern show?

53.The planner records 50 percent stocks, 40 percent bonds, and 10 percent cash for this client. What did the planner set?

54.A defined-benefit formula pays 2 percent of final pay times years of service. Final pay is $50,000 and service is 20 years. What is the annual benefit?

55.An employer puts $5,000 into a defined-contribution account. The account then falls in value. Who bears that investment result?

56.A plan says the worker owns 40 percent of the employer-funded benefit after two years of service. What is that 40 percent?

57.This retirement plan's own document says distributions under this plan start at age 72. Which statement is sound?

58.Parents want savings aimed at a child's college costs, not at a pension formula. Which arrangement matches the education goal?

59.A grandparent asks what a 529 plan is for. Which answer should the planner give?

60.A planner is explaining 529 savings to new parents. Which practice is sound?

61.A client received wages this year and a long-term gain on an investment held for several years. Which principle applies?

62.In this question only, tax is 10 percent on the first $30,000 of income and 20 percent above that. Income is $40,000. How much tax is due?

63.Under a progressive income tax, how are dollars above the first bracket treated compared with the first dollars?

64.A client wants a tax idea that stays true even if bracket tables are rewritten next year. Which statement can the planner teach?

65.A car is titled only in the decedent's name, and the will leaves it to a friend. How does that car generally pass?

66.A trust says the trustee pays income to a spouse for life and then pays principal to the children. What controls that property?

67.An IRA contract names a niece. The will gives the residue to a nephew. Who takes the IRA?

68.Property passes to a surviving spouse and qualifies for the marital deduction. Which estate-tax description is correct?

69.Which wording about the marital deduction is acceptable in a client meeting?

70.In a fiduciary engagement, product A fits the client and product B pays a higher fee but fits worse. What should the planner choose?

71.A medical bill of $2,000 is due in three weeks. The client has $2,000 in cash and no other liquid funds. Which action fits?

72.Which act is a misrepresentation?

73.During the information-gathering step, which set should the planner collect?

74.Monthly income is $4,000 and monthly expenses are $4,500. What does the cash-flow analysis show?

75.The cash-flow gap is clear, and the client wants a practical response. Which planning step comes next?

76.The client agrees to cut spending by $200 a month and to save that $200. Putting that choice into action is which step?

77.A year later, income is higher and the old monthly shortfall is gone. Checking whether the plan still fits is which step?

78.A home is worth $300,000, savings are $50,000, the mortgage is $120,000, and other debt is $30,000. What is net worth?

79.Salary is $60,000, investment income is $4,000, living costs are $45,000, and debt payments are $9,000. What is the annual cash-flow surplus?

80.The client wants an emergency fund equal to three months of $4,000 expenses. What is that cash target?

81.$2,000 earns simple interest of 6 percent for one year, with no compounding. What is the value at the end of the year?

82.$10,000 compounds at 10 percent per year for two years. What is the future value?

83.$8,000 earns simple interest of 5 percent for one year, with no compounding. What is the future value?

84.The client's main resource is the ability to earn $80,000 a year. Which risk should protection planning address?

85.Under this policy's own terms, disability income replaces 60 percent of a $50,000 salary. How much annual income does it replace?

86.A client may need help with daily activities for several years, not for a single afternoon. Which need is long-term care coverage meant to address?

87.A covered fire at home destroys the client's furniture and clothing. Which coverage is aimed at that loss?

88.While coordinating the rest of the plan, the planner mentions life insurance. How should that coverage be viewed?

89.Which set of decisions belongs together in one financial plan?

90.Priya wants help with insurance, her portfolio mix, retirement savings, taxes, a college fund, and her will. What should the work cover?

91.At the principles level, which description of a stock is correct?

92.At the principles level, which description of a bond is correct?

93.A client may need spending money within a few weeks. Why keep some cash even though cash yields less than stocks and bonds?

94.A client adds more stocks, but every new stock trades in the same market as the old ones. What did the client accomplish?

95.In a fiduciary engagement, the portfolio is a single stock, and the client cannot afford to lose it all. Which observation fits?

96.A worker has a defined-benefit plan at one job and a defined-contribution plan at another. Which statement is right?

97.Employer contributions in a retirement account total $10,000. The worker is 60 percent vested. How much of that benefit does the worker own?

98.A defined-contribution account receives an $8,000 contribution and then loses $1,000 of value. What is the account value from those facts?

99.A client asks the planner to treat a Social Security bend point as permanent national law. Which response fits?

100.College tuition is a stated goal for a child. Which use of a 529 plan fits that goal?

101.The facts say a family will put no more than $3,000 into a 529 plan this year. They contribute $3,000. What is true?

102.In this question only, tax is 15 percent on the first $20,000 of income and 25 percent above that. Income is $20,000. How much tax is due?

103.The same tax charges 15 percent on the first $20,000 and 25 percent above that. Income rises from $20,000 to $24,000. How much tax is due on the extra $4,000?

104.Ruth earned wages and also realized a long-term gain on shares she held for several years. Which statement is sound?

105.Which asset passes by the contract rather than by the will?

106.Which arrangement can hold property during life and pay it out under written directions?

107.After a death, a will is filed and a court oversees debts and the transfer of the probate assets. What is that court process called?

108.Which sequence matches the financial planning process?