HS 300 Financial Planning UPDATED ACTUAL Questions and
CORRECT Answers
Savings Rate (Savings + Employer Match) / Gross Income
Net Worth Assets - Liabilities
Current Ratio Cash & Cash Equivalents / Current Liabilities
, Emergency Fund Ratio Cash & Cash Equivalents / Monthly Nondiscretionary Cash Flows
Housing Ratio 1 Basic Housing Costs / Gross Pay
Housing Ratio 2 Basic Housing Costs + Debt Payments / Gross Pay
ROA End Assets - (Beginning Assets + Savings) / Beginning Assets
ROI End Investments - (Beginning Investments + Savings) / Beginning Investments
Investment Assets to Gross Pay Ratio Investment Assets + Cash & Cash Equivalents / Gross Pay
Real Rate of Return (1 + Nominal Rate) / (1 + Inflation Rate) - 1
Seven Steps 1. Understanding the client's personal & financial circumstances
2. Identifying & selecting goals
3. Analyzing the clients current course of action & potential alternative course of
action
4. Developing the financial planning recommendations
5. Presenting the financial planning recommendations
6. Implementing the financial planning recommendations
7. Monitoring progress & updating
Internal Data client's current financial goals & values
External Data external environment, economic environment, legal, political, taxation
Engagement Letter legal agreement that defines the business relationship, what the parties agree to,
services provided, duration, methods of communication, frequency of contact
Quantitative Data measurable, age, income, # of children
Qualitative Data feelings or attitude/beliefs
Rule 3241 prohibits 'registered persons' from being named as benes without written notice
to the member firm (and approval from the member firm)
SEC monitoring unlikely for registered investment advisors of less than $100M in client assets
Developmental School of Thought (Paradigm) human development occurs in stages overtime. disruptions at particular stages in
development will cause predictable problems, symptoms & behaviors
-moderately directive, focuses on past experiences to explain present difficulties
-has its origin and was influenced by Freudian psychoanalytic theory
CORRECT Answers
Savings Rate (Savings + Employer Match) / Gross Income
Net Worth Assets - Liabilities
Current Ratio Cash & Cash Equivalents / Current Liabilities
, Emergency Fund Ratio Cash & Cash Equivalents / Monthly Nondiscretionary Cash Flows
Housing Ratio 1 Basic Housing Costs / Gross Pay
Housing Ratio 2 Basic Housing Costs + Debt Payments / Gross Pay
ROA End Assets - (Beginning Assets + Savings) / Beginning Assets
ROI End Investments - (Beginning Investments + Savings) / Beginning Investments
Investment Assets to Gross Pay Ratio Investment Assets + Cash & Cash Equivalents / Gross Pay
Real Rate of Return (1 + Nominal Rate) / (1 + Inflation Rate) - 1
Seven Steps 1. Understanding the client's personal & financial circumstances
2. Identifying & selecting goals
3. Analyzing the clients current course of action & potential alternative course of
action
4. Developing the financial planning recommendations
5. Presenting the financial planning recommendations
6. Implementing the financial planning recommendations
7. Monitoring progress & updating
Internal Data client's current financial goals & values
External Data external environment, economic environment, legal, political, taxation
Engagement Letter legal agreement that defines the business relationship, what the parties agree to,
services provided, duration, methods of communication, frequency of contact
Quantitative Data measurable, age, income, # of children
Qualitative Data feelings or attitude/beliefs
Rule 3241 prohibits 'registered persons' from being named as benes without written notice
to the member firm (and approval from the member firm)
SEC monitoring unlikely for registered investment advisors of less than $100M in client assets
Developmental School of Thought (Paradigm) human development occurs in stages overtime. disruptions at particular stages in
development will cause predictable problems, symptoms & behaviors
-moderately directive, focuses on past experiences to explain present difficulties
-has its origin and was influenced by Freudian psychoanalytic theory
