CFP: Certified Financial Planner

Review 304 CFP practice questions with answer explanations and community insights.

Question 1

Mahesh is employed in a company on a basic salary of Rs. 20,000 pm and is allowed a dearness allowance of 30% of which 50% is included in salary for retirement benefits. His company pays him HRA of Rs. 5,000 pm. Compute his exemption on HRA for FY 2007-08. Mahesh is staying in Meerut and pays a house rent of Rs. 5,000 pm.

  1. Rs. 35,160.
  2. Rs. 24,840.
  3. Rs. 32,400.
  4. Rs. 60,000.

Question 2

The process of retirement planning would generally not involve ________.

  1. making a plan for management & disposition of assets at death
  2. projecting individual needs and goals into the future and making sound financial plan
  3. concentrating on maximizing returns on Present / Past Investments
  4. planning for staying physically healthy & making necessary psychological adjustment and to plan for housing and leisure / work

Question 3

A firm needs to borrow funds on a short term basis without reducing its current ratio below 1.25. The firms' current assets and current liabilities are Rs.1,600 and Rs.1,000 respectively. What amount can the fund borrow?

  1. Rs. 1,400
  2. Rs. 1,200
  3. Rs. 1,500
  4. Rs. 1,000

Question 4

The May futures contract on XYZ Ltd. closed at Rs. 3,940 yesterday. It closes today at Rs. 3,898.60. The spot closes at Rs. 3,800. Raju has a short position of 3,000 in the May futures contract. He further sells 2,000 units of May expiring put options on XYZ with a strike price of Rs. 3,900 for a premium of Rs. 110 per unit on the same day. What is his net obligation to/from the clearing corporation today?

  1. Pay Rs. 3,44,200.
  2. Receive Rs. 3,44,200.
  3. Receive Rs. 6,40,000.
  4. Pay Rs. 95,800.

Question 5

The process of retirement planning would generally not involve ________.

  1. Concentrating on maximizing returns on Present / Past Investments
  2. Projecting individual needs and goals into the future and making sound financial plan
  3. Making a plan for management & disposition of assets at death
  4. Planning for staying physically healthy & making necessary psychological adjustment and to plan for housing And leisure / work