CFP Certified Financial Planner MCQ 2

Question 1

A client aged 55 wants to withdraw from their 401(k) early. Which exception allows penalty-free withdrawals before age 59½?

Accepted Answer

Substantially Equal Periodic Payments (SEPP) under Rule 72(t)

Answer

Rule 72(t) SEPP allows penalty-free early withdrawals from retirement accounts as long as payments continue for at least 5 years or until age 59½, whichever is longer.

Question 2

Under the CFP Code of Ethics, which duty requires a CFP® professional to place the client's interests above their own?

Accepted Answer

Loyalty

Answer

The duty of Loyalty requires CFP® professionals to place the interests of the client above those of the CFP® professional and the firm.

Question 3

A married couple filing jointly in 2024 has a combined AGI of $250,000. What is their Medicare surtax exposure on net investment income?

Accepted Answer

Both 3.8% NII surtax and 0.9% Additional Medicare Tax apply

Answer

At $250,000 AGI for MFJ, the couple hits the threshold for both the 3.8% Net Investment Income Tax on investment income and the 0.9% Additional Medicare Tax on earned income.

Question 4

Which Social Security claiming strategy is generally most beneficial for a healthy single individual who expects to live past age 80?

Accepted Answer

Delay claiming until age 70 to maximize the monthly benefit

Answer

Delaying Social Security until age 70 increases the monthly benefit by 8% per year beyond FRA, making it optimal for individuals with above-average life expectancy.

Question 5

A client holds a bond with a 6% coupon, 10 years to maturity, and a current price of $1,080. If market rates rise to 7%, what happens to the bond's price?

Accepted Answer

The price falls below $1,080 because the bond is now less competitive

Answer

Bond prices move inversely with interest rates; when market rates rise above the coupon rate, the bond's price falls to make its yield competitive with new issues.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Certified Financial Planner MCQ 2