CFP Research & Evidence-Based Practice 4

Question 1

A financial planner uses a risk tolerance questionnaire that consistently produces the same scores when administered to the same client one week apart. This property is called:

Accepted Answer

Test-retest reliability

Answer

Test-retest reliability refers to the consistency of a measure when repeated on the same subjects under the same conditions over time.

Question 2

A CFP practitioner discovers that a frequently cited study on retirement readiness used a convenience sample of college-educated respondents. The biggest threat to applying this research broadly is:

Accepted Answer

Low external validity (limited generalizability)

Answer

A convenience sample of a homogeneous group threatens external validity because findings may not generalize to the broader, more diverse population.

Question 3

In Bayesian reasoning applied to financial planning, the 'prior probability' refers to:

Accepted Answer

The initial probability estimate before incorporating new evidence

Answer

In Bayesian reasoning, the prior probability represents beliefs or estimates established before new evidence is incorporated.

Question 4

A financial planning researcher wants to measure 'financial well-being.' Since this is a theoretical construct, the researcher must establish which type of validity?

Accepted Answer

Construct validity

Answer

Construct validity ensures that a measurement instrument actually measures the theoretical construct it is intended to measure.

Question 5

A planner reads a study with a very narrow 95% confidence interval around its primary estimate. This narrow interval suggests:

Accepted Answer

High precision in the estimate due to a large sample size or low variability

Answer

A narrow confidence interval indicates high precision in the estimate, typically resulting from a large sample size or low variance in the data.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Research & Evidence-Based Practice 4