BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
Chapter 1
True or
False:
1. One definition of financial planning is cash flow planning.
2. A good financial plan is one that shows the client how to achieve all his or her
goals.
Answers:
1. True
2. False: the client must prioritize, and may even have to sacrifice some goals
to achieve others.
Multiple Choice:
1. A good financial planning report must include an analysis of all of the following
EXCEPT: a.
Where you are now
b. Where you want to be
c. Why you failed previously
d. How to reach your
goals Answer: C
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 2
True or
False:
1. Clients are best served by a financial planning team with expertise in
different fields rather than a single advisor.
2. The authors suggest that risk/reward principles must include both economic
and psychological considerations.
,BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
3. The truly professional advisor will continue his/her education though
various means, including joining organizations such as FPA, NAPFA, etc.
4. Clients who have a chance to participate in the financial planning process
are more likely to resent paying for the services of the advisors.
Answers:
1. True
2. True
3. True
4. False
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 3
True or
False:
1. According to the authors, financial planning is a process, not a product or
service.
2. Clients have better chances of meeting their objectives if the objectives
are realistic, welldefined and measurable.
3. The authors recommend prioritizing client goals as well as attaching a time
frame to each goal. Answers:
1. True
2. True
3. True
Multiple Choice:
1. The five steps in the financial management process outlined by the authors
include the following EXCEPT:
a. Establish goals
b. Collect data
c. Measure performance
d. Establish living
wills Answer:
,BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
1. d
TOOLS & TECHNIQUES OF FINANCIAL PLANNING
8th Edition College Course Materials
Chapter 4
True or
False:
1. The financial planner must always assume the role of the quarterback of
the financial planning team.
2. Clients who put return of principal above return on principal should only
use risk-free investments.
3. Automatic investment plans are a more effective way to build wealth than
discretionary investments as they allow clients to put aside money before
they consider spending it.
4. The philosophy of “owning, not loaning” is the belief that fixed income
investments are a better alternative to equities for building wealth.
5. “Multidimensional” diversification means diversifying across classes of
investment vehicles, by geographic location, time, etc.
6. Dollar cost averaging injects discipline into the investment process.
7. The concept of a “discount” for federal estate taxes refers to the system
of prepaying estate taxes.
8. The debt repayment is essentially a risk-free investment.
Answers:
1. False
2. False: the statement does not imply total avoidance of risk.
3. True
4. False
5. True
6. True
7. False
8. True
Multiple Choice:
1. Match the terms in column A with the description in column B.
A B
, BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
a. Risk management 1. Boosts investment return by
deferring taxes
b. Marketability of borrowing 2. Earning rate of return greater than
the
cost
c. Liquidity 3. Protecting ground gained without
giving up
much in return
d. Tax leverage 4. Irrevocable life insurance trust
e. Estate freeze 5. Ability to turn investment quickly
into cash
with little or no loss
f. Estate tax-free wealth transfer 6. Ability to quickly dispose of an
investment
g. Leverage 7. Transfer asset growth to next
generation Answer:
1. a : 3
b:6
c:5d
:1
e:7
f : 4
g:2
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 5
True or
False:
1. A truly personalized financial plan must consider factors such as cultural
background and family experiences of the client.
2. The financial planner must focus exclusively on the rational, rather than
emotional aspects of the client’s goals and aspirations.
3. It is possible to assess a client’s attitudes about money based on a
simple classification system, based on age, marital status, etc.
4. The financial planner must recognize that there is a strong relationship
between stress and money.
Answers:
1. True
PLANNING Q&A 2022
Chapter 1
True or
False:
1. One definition of financial planning is cash flow planning.
2. A good financial plan is one that shows the client how to achieve all his or her
goals.
Answers:
1. True
2. False: the client must prioritize, and may even have to sacrifice some goals
to achieve others.
Multiple Choice:
1. A good financial planning report must include an analysis of all of the following
EXCEPT: a.
Where you are now
b. Where you want to be
c. Why you failed previously
d. How to reach your
goals Answer: C
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 2
True or
False:
1. Clients are best served by a financial planning team with expertise in
different fields rather than a single advisor.
2. The authors suggest that risk/reward principles must include both economic
and psychological considerations.
,BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
3. The truly professional advisor will continue his/her education though
various means, including joining organizations such as FPA, NAPFA, etc.
4. Clients who have a chance to participate in the financial planning process
are more likely to resent paying for the services of the advisors.
Answers:
1. True
2. True
3. True
4. False
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 3
True or
False:
1. According to the authors, financial planning is a process, not a product or
service.
2. Clients have better chances of meeting their objectives if the objectives
are realistic, welldefined and measurable.
3. The authors recommend prioritizing client goals as well as attaching a time
frame to each goal. Answers:
1. True
2. True
3. True
Multiple Choice:
1. The five steps in the financial management process outlined by the authors
include the following EXCEPT:
a. Establish goals
b. Collect data
c. Measure performance
d. Establish living
wills Answer:
,BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
1. d
TOOLS & TECHNIQUES OF FINANCIAL PLANNING
8th Edition College Course Materials
Chapter 4
True or
False:
1. The financial planner must always assume the role of the quarterback of
the financial planning team.
2. Clients who put return of principal above return on principal should only
use risk-free investments.
3. Automatic investment plans are a more effective way to build wealth than
discretionary investments as they allow clients to put aside money before
they consider spending it.
4. The philosophy of “owning, not loaning” is the belief that fixed income
investments are a better alternative to equities for building wealth.
5. “Multidimensional” diversification means diversifying across classes of
investment vehicles, by geographic location, time, etc.
6. Dollar cost averaging injects discipline into the investment process.
7. The concept of a “discount” for federal estate taxes refers to the system
of prepaying estate taxes.
8. The debt repayment is essentially a risk-free investment.
Answers:
1. False
2. False: the statement does not imply total avoidance of risk.
3. True
4. False
5. True
6. True
7. False
8. True
Multiple Choice:
1. Match the terms in column A with the description in column B.
A B
, BISN EXAM-TOOLS&TECHNIQUES OF FINANCIAL
PLANNING Q&A 2022
a. Risk management 1. Boosts investment return by
deferring taxes
b. Marketability of borrowing 2. Earning rate of return greater than
the
cost
c. Liquidity 3. Protecting ground gained without
giving up
much in return
d. Tax leverage 4. Irrevocable life insurance trust
e. Estate freeze 5. Ability to turn investment quickly
into cash
with little or no loss
f. Estate tax-free wealth transfer 6. Ability to quickly dispose of an
investment
g. Leverage 7. Transfer asset growth to next
generation Answer:
1. a : 3
b:6
c:5d
:1
e:7
f : 4
g:2
TOOLS & TECHNIQUES OF FINANCIAL PLANNING 8th Edition College Course
Materials
Chapter 5
True or
False:
1. A truly personalized financial plan must consider factors such as cultural
background and family experiences of the client.
2. The financial planner must focus exclusively on the rational, rather than
emotional aspects of the client’s goals and aspirations.
3. It is possible to assess a client’s attitudes about money based on a
simple classification system, based on age, marital status, etc.
4. The financial planner must recognize that there is a strong relationship
between stress and money.
Answers:
1. True
