CFP EXAM QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS ALREADY PASSED!!!
Question 1 Lisa buys 500 shares of XYZ stock at a market price of $40 per share.
The position is subject to an initial margin requirement of 60% and a maintenance
margin threshold of 30%. Below what stock price will Lisa trigger a margin call?
A. $20 B. $22.86 C. $57.14 D. $80.00
ANSWER: B. $22.86 ✔✔
Question 2 Laureen buys 1,000 shares of CWC stock at $80 each, using an initial
margin requirement of 65% and a maintenance margin of 40%. If the stock value
drops down to $30 per share, what is the required equity contribution she must
inject per share?
A. $2/share B. $8/share C. $10/share D. $12/share
ANSWER: C. $10/share ✔✔
Required Equity Actual Equity
Price: 30 Price: 30
Main. Margin *.40 Debt: (28)
Required Equity 12 Actual: $2
Debt = $80* (1-.65) = $28
Required - Actual = contribution amount 12-2=10
, MSFT declared a dividend payable to shareholders on the record date of Wed. May
15th. Which is the last possible date an investor could purchase the stock and still
receive the dividend?
A. purchased on May 13th
B. purchased on May 12th
C. purchased on May 11th
D. purchased on May 10th -ANSWER ✔✔D. May 10th.
Ex dividend date would be Monday the 13th, and in order to receive the dividend
the investor would have to purchase prior to the ex-dividend date. Since the 13th is
a Monday the last possible date an investor could purchase the stock and still
receive the dividend would be Friday the 10th.
If June 4 is the date of record, when must Joe purchase the stock in order to receive
the dividend?
A. June 1
B. June 2
C. June 3
D. June 4
E. May 31 -ANSWER ✔✔A. June 1st
Date of record minus 3 days. When purchasing a stock you have to buy before the
ex dividend date to receive the dividend.
You are interviewing James Smith, CFP to manage your investments and provide
financial guidance in other areas of your life. James states that his investment
ANSWERS WITH COMPLETE
SOLUTIONS ALREADY PASSED!!!
Question 1 Lisa buys 500 shares of XYZ stock at a market price of $40 per share.
The position is subject to an initial margin requirement of 60% and a maintenance
margin threshold of 30%. Below what stock price will Lisa trigger a margin call?
A. $20 B. $22.86 C. $57.14 D. $80.00
ANSWER: B. $22.86 ✔✔
Question 2 Laureen buys 1,000 shares of CWC stock at $80 each, using an initial
margin requirement of 65% and a maintenance margin of 40%. If the stock value
drops down to $30 per share, what is the required equity contribution she must
inject per share?
A. $2/share B. $8/share C. $10/share D. $12/share
ANSWER: C. $10/share ✔✔
Required Equity Actual Equity
Price: 30 Price: 30
Main. Margin *.40 Debt: (28)
Required Equity 12 Actual: $2
Debt = $80* (1-.65) = $28
Required - Actual = contribution amount 12-2=10
, MSFT declared a dividend payable to shareholders on the record date of Wed. May
15th. Which is the last possible date an investor could purchase the stock and still
receive the dividend?
A. purchased on May 13th
B. purchased on May 12th
C. purchased on May 11th
D. purchased on May 10th -ANSWER ✔✔D. May 10th.
Ex dividend date would be Monday the 13th, and in order to receive the dividend
the investor would have to purchase prior to the ex-dividend date. Since the 13th is
a Monday the last possible date an investor could purchase the stock and still
receive the dividend would be Friday the 10th.
If June 4 is the date of record, when must Joe purchase the stock in order to receive
the dividend?
A. June 1
B. June 2
C. June 3
D. June 4
E. May 31 -ANSWER ✔✔A. June 1st
Date of record minus 3 days. When purchasing a stock you have to buy before the
ex dividend date to receive the dividend.
You are interviewing James Smith, CFP to manage your investments and provide
financial guidance in other areas of your life. James states that his investment
