CFP Certified Financial Planner 3

Question 1

A couple has $1.2 million in combined estate assets in 2024. Which estate planning tool most efficiently utilizes both spouses' federal estate tax exemptions?

Accepted Answer

Bypass trust (credit shelter trust)

Answer

A bypass trust funds up to the deceased spouse's exemption amount, sheltering it from estate tax at the surviving spouse's death and utilizing both exemptions.

Question 2

What is the wash-sale rule's primary impact on tax-loss harvesting strategies?

Accepted Answer

Disallows the loss if a substantially identical security is purchased within 30 days before or after the sale

Answer

The wash-sale rule disallows the claimed loss if a substantially identical security is bought within 30 days before or after the sale, deferring the loss to the replacement shares.

Question 3

Which life insurance policy type offers permanent coverage with a fixed premium, guaranteed death benefit, and no cash value investment risk to the policyholder?

Accepted Answer

Whole life insurance

Answer

Whole life insurance provides a guaranteed death benefit, fixed premiums, and guaranteed cash value growth with no market risk transferred to the policyholder.

Question 4

A self-employed client earns $200,000 net profit in 2024. What is the maximum contribution to a Solo 401(k) plan (ignoring catch-up)?

Accepted Answer

$69,000

Answer

The 2024 Solo 401(k) limit is $69,000, combining up to $23,000 in employee deferrals plus up to 25% of net self-employment income as employer contributions.

Question 5

In portfolio theory, which measure indicates the proportion of a portfolio's total risk that is attributable to market (systematic) risk?

Accepted Answer

R-squared (R²)

Answer

R-squared measures the percentage of a portfolio's variance explained by a benchmark, indicating how much of total risk is systematic market risk.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Certified Financial Planner 3