FREE Certified Financial Planner MCQ Questions and Answers

Question 1

Paula recently learned that she had successfully passed the CFP exam. She could choose from the following:

Accepted Answer

Once she has satisfied the educational and experience requirements, she must finish the certification process by signing the Ethics Declaration and Agreement.

Answer

Passing the CFP exam is a crucial step, but it does not immediately grant the right to use the CFP marks or charge fees. To become a certified CFP professional, Paula must also satisfy the educational and experience requirements, and critically, sign the Ethics Declaration and Agreement. This final step signifies her commitment to upholding the CFP Board's ethical standards, completing the certification process.

Question 2

Helen wants to get involved in her hometown's startup scene. She is divorced, has a net worth of $250,003, an annual salary of $101,000, and is not an accredited investor. Which of the following could Helen perform in accordance with the JOBS Act?

Accepted Answer

Contribute up to $10,100 through a crowdfunding portal.

Answer

Under the JOBS Act, non-accredited investors can participate in crowdfunding, but their contribution limits are tied to their income and net worth. For an investor with an annual income or net worth between $107,000 and $214,000, the maximum contribution is 10% of the lesser of their annual income or net worth. Helen's annual salary is $101,000 and her net worth is $250,003, so 10% of her salary ($10,100) is the lesser amount, making it her maximum crowdfunding contribution.

Question 3

Which of the following actions by Matthew would be considered a violation of the Integrity element of the CFP Standards of Conduct?

Accepted Answer

Owned a firm that opened bank accounts for foreign individuals subject to international sanctions so that they can skirt the restrictions.

Answer

The Integrity element of the CFP Standards of Conduct requires CFP professionals to be honest, candid, and to act in the best interest of their clients and the public. Owning a firm that facilitates skirting international sanctions is a direct violation of this principle, as it involves dishonest and unlawful conduct. This action demonstrates a clear disregard for ethical and legal responsibilities, undermining trust and integrity.

Question 4

In order to save money for her dream of starting her own business when she is 42 years old, Ellie has a number of possibilities. By then, she needs $45,000. Which choice is ideal for her?

Accepted Answer

Put $1,250 a month into an online bank account with a 2% annual rate of return.

Answer

To determine the ideal choice, we need to calculate which option allows Ellie to reach her $45,000 goal. Assuming a reasonable timeframe, such as 3 years (36 months) to reach age 42, we can evaluate the future value of each monthly contribution. Putting $1,250 a month into an online bank account at 2% annual return would accumulate approximately $46,000 over 3 years, making it the only option that meets her specific goal within this timeframe. The higher monthly contribution significantly outweighs the lower interest rate in this scenario.

Question 5

Rebecca the planner is creating a list of paperwork that her client needs to do or bring to the meeting. Assume that the financial planning agreement has been signed and specifies that it will cover retirement planning, investment allocations, and preparing for insurance in the event of death or incapacity. Which of the following Rebecca should not ask the client?

Accepted Answer

Can you give me a copy of your genealogy for three generations to determine longevity?

Answer

While a financial planner needs comprehensive information, a client's genealogy for three generations is generally not a standard or necessary request for typical financial planning, even when covering retirement, investments, and insurance. This level of detail is excessive for determining longevity in a financial planning context. Other options like household budgets, benefits books, and investment account copies are essential for creating a thorough financial plan.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

FREE Certified Financial Planner MCQ Questions and Answers