FPQP Exam Study Set 2026
Exam Questions and Answers |
100% Pass
Abbreviation for the Financial Planning process - 🧠ANSWER ✔✔Umbrella's
In
A
Downpour
Prevent
Immense
,Mess
What are the steps in the Financial Planning process? - 🧠ANSWER ✔✔-
Understand the client's situation
- Identify the goals of the clients
- Analyze the client's course & potential alternative courses
- Develop financial planning recommendations
- Present recommendations
- Implement the recommendations
- Monitor progress & update the implemented recommendations
Basic Liquidity Ratio - 🧠ANSWER ✔✔= Liquid Assets/Monthly Expenses
- should be 3% or above
Savings Ratio - 🧠ANSWER ✔✔= savings & investments / annual gross
income
- should have a minimum of 10%
,Front-End Debt-to-Income Ratio - 🧠ANSWER ✔✔= PITI (housing costs) /
annual gross income
- housing cost ratio
- should be maximum of 28% of gross income
What is PITI in the front-end ratio? - 🧠ANSWER ✔✔- Principle, Interest,
Taxes, Insurance
- Principle & Interest = mortgage loan payment
Back-End Debt-to-Income Ratio - 🧠ANSWER ✔✔= annual debt repayments
/ annual gross income
- total debt ratio
- debt repayment = any loan payment (home, auto, student, etc.)
Nonmortgage Debt-to-Income Ratio - 🧠ANSWER ✔✔= annual non-
mortgage debt repayment / annual net income
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, - consumer ratio
- should be maximum of 20% of net income
- non-mortgage = non-home (auto, student, etc.)
Fair Credit Billing Act - 🧠ANSWER ✔✔Provides consumers with a means to
dispute a billing error on open-ended credit accounts (credit and charge
cards)
What is included on the Statement of Financial Position (SFP)? -
🧠ANSWER ✔✔Assets, Liabilities & Net Worth
What is the SFP also known as? - 🧠ANSWER ✔✔Balance Sheet
What is included in the Assets portion of the SFP? - 🧠ANSWER ✔✔-
cash/cash equivalents
- invested assets
- use assets
What is an invested asset? - 🧠ANSWER ✔✔Assets that are not for
personal use of the family and cannot be readily converted into cash in
case of an emergency.
Exam Questions and Answers |
100% Pass
Abbreviation for the Financial Planning process - 🧠ANSWER ✔✔Umbrella's
In
A
Downpour
Prevent
Immense
,Mess
What are the steps in the Financial Planning process? - 🧠ANSWER ✔✔-
Understand the client's situation
- Identify the goals of the clients
- Analyze the client's course & potential alternative courses
- Develop financial planning recommendations
- Present recommendations
- Implement the recommendations
- Monitor progress & update the implemented recommendations
Basic Liquidity Ratio - 🧠ANSWER ✔✔= Liquid Assets/Monthly Expenses
- should be 3% or above
Savings Ratio - 🧠ANSWER ✔✔= savings & investments / annual gross
income
- should have a minimum of 10%
,Front-End Debt-to-Income Ratio - 🧠ANSWER ✔✔= PITI (housing costs) /
annual gross income
- housing cost ratio
- should be maximum of 28% of gross income
What is PITI in the front-end ratio? - 🧠ANSWER ✔✔- Principle, Interest,
Taxes, Insurance
- Principle & Interest = mortgage loan payment
Back-End Debt-to-Income Ratio - 🧠ANSWER ✔✔= annual debt repayments
/ annual gross income
- total debt ratio
- debt repayment = any loan payment (home, auto, student, etc.)
Nonmortgage Debt-to-Income Ratio - 🧠ANSWER ✔✔= annual non-
mortgage debt repayment / annual net income
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, - consumer ratio
- should be maximum of 20% of net income
- non-mortgage = non-home (auto, student, etc.)
Fair Credit Billing Act - 🧠ANSWER ✔✔Provides consumers with a means to
dispute a billing error on open-ended credit accounts (credit and charge
cards)
What is included on the Statement of Financial Position (SFP)? -
🧠ANSWER ✔✔Assets, Liabilities & Net Worth
What is the SFP also known as? - 🧠ANSWER ✔✔Balance Sheet
What is included in the Assets portion of the SFP? - 🧠ANSWER ✔✔-
cash/cash equivalents
- invested assets
- use assets
What is an invested asset? - 🧠ANSWER ✔✔Assets that are not for
personal use of the family and cannot be readily converted into cash in
case of an emergency.
