CFP: Certified Financial Planner

CFP: Certified Financial Planner practice questions, page 5 of 12, with answer review and explanations.

Question 21

Dividend received by the writer of a Call during the life span of an Option __________.

  1. can be pocketed by the writer
  2. has to be given to the buyer of the option, only if he eventually exercises the option
  3. increases the premium value by an equivalent amount
  4. decreases the strike price

Question 22

Risk free return rate is 8%. You expect that the return on market would be 14%. The expected return of Security A with Beta of 0.70 is

  1. 17.8%
  2. 15.4%
  3. 12.2%
  4. 18.2%

Question 23

If a Company declares and pays dividend, this transaction will ________.

  1. reduce stockholders equity
  2. increase liabilities
  3. decrease net income
  4. not affect total assets

Question 24

Divya, a CFP certificant, recently took Ajay as a client. After receiving an excessive number of questions from Ajay regarding his plan, Divya became desperate and changed her business phone number to an unlisted number. She notified Ajay that he could not have her new phone number, and that he must communicate with her via e-mail or fax. Which principle, if any, embodies Rules that require Divya to provide Ajay with her new number?

  1. Integrity.
  2. Fairness.
  3. Objectivity.
  4. Professionalism.

Question 25

Deficit financing provision in the Budget will lead to the following/s: (A) Increase in money supply and rise in prices of goods and services in market(B) Fall in national income and Increase in GDP.

  1. (A) only.
  2. (B) only
  3. Both (A) & (B)
  4. None of the above