CFC Study Guide 2026
Everything you need to pass the CFC exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 CFC Exam Format at a Glance
📚 CFC Topics to Study (23)
✍️ Sample CFC Questions & Answers
1. Which investment vehicle allows a CFC client to gain diversified exposure to real estate without directly owning property?
REITs are publicly traded companies that own income-producing real estate and must distribute at least 90% of taxable income to shareholders.
2. For a business continuation plan, which buy-sell agreement structure requires each owner to personally purchase life insurance on the other owners?
In a cross-purchase agreement, each co-owner buys and owns life insurance on the other owners, using proceeds to purchase the deceased owner's interest directly.
3. Sequence-of-returns risk is most dangerous for retirees because:
When poor market returns occur in early retirement while the retiree is withdrawing funds, fewer shares remain to benefit from eventual recovery, accelerating portfolio depletion.
4. The 'catch-up contribution' provision allows workers aged 50 and older to contribute an additional $7,500 to their 401(k) in 2024. This provision primarily benefits:
Catch-up contributions help older workers who may have started saving late or experienced financial setbacks to accelerate tax-advantaged retirement savings in their peak earning years.
5. A defined benefit pension plan provides retirement income based on:
Defined benefit plans calculate benefits using a formula that typically incorporates final average salary, years of service, and a benefit multiplier.
6. Which valuation method is typically most appropriate for capital-intensive industries like utilities or real estate?
Asset-based valuation is most relevant when a company's value is closely tied to its tangible assets, such as in utilities, real estate, or holding companies.