CFP: Certified Financial Planner

CFP: Certified Financial Planner practice questions, page 10 of 12, with answer review and explanations.

Question 46

In the calculation of the present value of shares, increasing the growth factor (all other things being equal) will cause the value to ________.

  1. Stay the same
  2. Decrease
  3. Increase
  4. Increase then Decrease

Question 47

The bid-ask spread is________. (A) Broker's commission (B) Dealer's gross income from a transaction (C) Larger for illiquid securities than for liquid ones.

  1. (C) only
  2. (B) only
  3. (A), (B) & (C)
  4. (A) only

Question 48

Bond prices are sensitive to the coupon rate of the bond and the maturity term of the bond. Bond prices are less sensitive to changes in interest rates when the bonds have_______.

  1. large coupon rate and short maturity
  2. large coupon and long maturity
  3. small coupon rate and short maturity
  4. small coupon rate and long maturity

Question 49

For a person aged 25 years retirement needs may best be calculated by _____________.

  1. Income replacement method
  2. Expense replacement method
  3. Both
  4. None of the above.

Question 50

Pension received from a former employer is classified under the head _________.

  1. Gratuity
  2. Income from other sources
  3. Salary
  4. Capital Gains