CRPC EXAM/ Actual CRPC Questions with Correct
Verified Answers/ Latest 2024/2025.
Which one of the following is an objective of an investment policy?
Correct Answer - To provide a basis for review
To provide a foundation of goals, time horizons, and constraints
To provide a performance evaluation
The investment policy does not ordain which individual securities will be selected.
Which one of the following is an appropriate element of an investment policy?
Correct Answer - All equity assets must be in listed securities.
Bonds must be investment grade.
The portfolio should produce $10,000 in income annually.
Which one of the following is one of the steps in the asset allocation process?
Correct Answer - Determine representative asset classes
Select individual securities
Review portfolio performance and the investment climate
An investor has a 6%, 10,000 par value bond that matures in 15 years. The yield to maturity on similar
bonds currently is 5.5%. What is the price of this bond?
Correct Answer - The answer is $10,506.23. For a $10,000 par value bond, set the calculator to the END
mode, 2 P/YR, FV = 10,000, PMT = 300 (6% x $10,000 = $600 annually ÷ 2), N = 30, Shift, N, I/YR = 5.5,
then PV = -$10,506.23.
The Sharpe ratio measures
Correct Answer - total risk as measured by standard deviation.
pg. 1
,Growth stocks are characterized by
Correct Answer - high market-to-book ratios and high P/E ratios. Growth stocks usually have high profit
margins.
Value stocks are characterized by
Correct Answer - low market-to-book ratios and low P/E ratios.
Tactical asset allocation
Correct Answer - is an active approach that moves money to those areas deemed to be the most
promising. Sector rotation and momentum investing are strategies used with tactical asset allocation.
Which one of the following can be used to measure a mutual fund's risk-adjusted return as measured by
total risk?
Correct Answer - the fund's standard deviation
Beta measures
Correct Answer - systematic risk only.
Standard deviation is a measure
Correct Answer - of total risk; that is, both systematic and unsystematic risk.
Investors who want to bear the least amount of risk should acquire stocks with beta coefficients
Correct Answer - less than 0.5.
When seeking investments that have the least amount of risk, the lowest beta should be selected.
The lower the coupon rate,
Correct Answer - the greater the price volatility of a bond.
Total return cannot be determined without knowing the purchase price. The coupon rate is inversely
related to the bond's price volatility.
pg. 2
,Small firm investors
Correct Answer - should have a long time horizon.
small firm effect
Correct Answer - an anomaly to the efficient market hypothesis since greater returns over time have
been realized commensurate with the associated risk.
Small firm investors sell when 40% of the company's shares become owned by institutional investors.
Small firm investors should have a long time horizon due to the increased risk/volatility associated with
this investment strategy.
A worker's primary insurance amount (PIA) is the amount they receive from Social Security
Correct Answer - if he or she began payments at full retirement age
The PIA
Correct Answer - is the amount the worker would receive if he or she began payments at full retirement
age.
For a worker whose full retirement age is 66 or later, the annual delayed retirement credit percentage for
the years you delay receipt of benefits beyond (FRA) is
Correct Answer - 8%.
Max Age 70 - This equals to a total increase of 32% above their primary insurance amount (PIA).
Delayed retirement credit is accrued 8/12th of a percent per month
Delaying receipt of benefits (for example until age 70) will result in all of the following except
Correct Answer - permanently reduced benefit amount.
pg. 3
, Michael, a 62-year-old single man, is considering beginning his Social Security benefits to supplement his
income of $18,000 per year. How much will he lose in Social Security benefits due to the earned income
restrictions?
Correct Answer - $0
Because his earned income is below the $19,560 (2022) earnings cap for singles, he will not be impacted
by the earned income benefit reduction.
If provisional income exceeds all the thresholds given, then a maximum of ___________ of Social
Security benefits are subject to taxation.
Correct Answer - 85%
Spousal retirement benefits can be claimed as early as age ______.
Correct Answer - 62
Spousal retirement benefits can begin as early as age 62, assuming that the worker spouse has filed to
collect his or her own benefit.
What is the unit benefit formula percentage used by the BRS program?
Correct Answer - 2.0%
The BRS uses a multiplier of 2.0%. (The key is to understand that under the BRS, the defined benefit
pension plan has a reduced benefit.) For this accepted reduction, the Department of Defense (DOD) will
pay 1% and match up to an additional 4% of the member's TSP contribution.
Carla is collecting $600 per month from a government pension and is also eligible to receive a Social
Security spousal benefit of $1,000 per month. Due to the GPO, her Social Security spousal benefit will be
reduced to ____________.
Correct Answer - $600
Due to the GPO, her Social Security spousal benefit will be reduced by 2/3 of her state government
pension amount, or $400. $1,000 - $400 = $600.
pg. 4
Verified Answers/ Latest 2024/2025.
Which one of the following is an objective of an investment policy?
Correct Answer - To provide a basis for review
To provide a foundation of goals, time horizons, and constraints
To provide a performance evaluation
The investment policy does not ordain which individual securities will be selected.
Which one of the following is an appropriate element of an investment policy?
Correct Answer - All equity assets must be in listed securities.
Bonds must be investment grade.
The portfolio should produce $10,000 in income annually.
Which one of the following is one of the steps in the asset allocation process?
Correct Answer - Determine representative asset classes
Select individual securities
Review portfolio performance and the investment climate
An investor has a 6%, 10,000 par value bond that matures in 15 years. The yield to maturity on similar
bonds currently is 5.5%. What is the price of this bond?
Correct Answer - The answer is $10,506.23. For a $10,000 par value bond, set the calculator to the END
mode, 2 P/YR, FV = 10,000, PMT = 300 (6% x $10,000 = $600 annually ÷ 2), N = 30, Shift, N, I/YR = 5.5,
then PV = -$10,506.23.
The Sharpe ratio measures
Correct Answer - total risk as measured by standard deviation.
pg. 1
,Growth stocks are characterized by
Correct Answer - high market-to-book ratios and high P/E ratios. Growth stocks usually have high profit
margins.
Value stocks are characterized by
Correct Answer - low market-to-book ratios and low P/E ratios.
Tactical asset allocation
Correct Answer - is an active approach that moves money to those areas deemed to be the most
promising. Sector rotation and momentum investing are strategies used with tactical asset allocation.
Which one of the following can be used to measure a mutual fund's risk-adjusted return as measured by
total risk?
Correct Answer - the fund's standard deviation
Beta measures
Correct Answer - systematic risk only.
Standard deviation is a measure
Correct Answer - of total risk; that is, both systematic and unsystematic risk.
Investors who want to bear the least amount of risk should acquire stocks with beta coefficients
Correct Answer - less than 0.5.
When seeking investments that have the least amount of risk, the lowest beta should be selected.
The lower the coupon rate,
Correct Answer - the greater the price volatility of a bond.
Total return cannot be determined without knowing the purchase price. The coupon rate is inversely
related to the bond's price volatility.
pg. 2
,Small firm investors
Correct Answer - should have a long time horizon.
small firm effect
Correct Answer - an anomaly to the efficient market hypothesis since greater returns over time have
been realized commensurate with the associated risk.
Small firm investors sell when 40% of the company's shares become owned by institutional investors.
Small firm investors should have a long time horizon due to the increased risk/volatility associated with
this investment strategy.
A worker's primary insurance amount (PIA) is the amount they receive from Social Security
Correct Answer - if he or she began payments at full retirement age
The PIA
Correct Answer - is the amount the worker would receive if he or she began payments at full retirement
age.
For a worker whose full retirement age is 66 or later, the annual delayed retirement credit percentage for
the years you delay receipt of benefits beyond (FRA) is
Correct Answer - 8%.
Max Age 70 - This equals to a total increase of 32% above their primary insurance amount (PIA).
Delayed retirement credit is accrued 8/12th of a percent per month
Delaying receipt of benefits (for example until age 70) will result in all of the following except
Correct Answer - permanently reduced benefit amount.
pg. 3
, Michael, a 62-year-old single man, is considering beginning his Social Security benefits to supplement his
income of $18,000 per year. How much will he lose in Social Security benefits due to the earned income
restrictions?
Correct Answer - $0
Because his earned income is below the $19,560 (2022) earnings cap for singles, he will not be impacted
by the earned income benefit reduction.
If provisional income exceeds all the thresholds given, then a maximum of ___________ of Social
Security benefits are subject to taxation.
Correct Answer - 85%
Spousal retirement benefits can be claimed as early as age ______.
Correct Answer - 62
Spousal retirement benefits can begin as early as age 62, assuming that the worker spouse has filed to
collect his or her own benefit.
What is the unit benefit formula percentage used by the BRS program?
Correct Answer - 2.0%
The BRS uses a multiplier of 2.0%. (The key is to understand that under the BRS, the defined benefit
pension plan has a reduced benefit.) For this accepted reduction, the Department of Defense (DOD) will
pay 1% and match up to an additional 4% of the member's TSP contribution.
Carla is collecting $600 per month from a government pension and is also eligible to receive a Social
Security spousal benefit of $1,000 per month. Due to the GPO, her Social Security spousal benefit will be
reduced to ____________.
Correct Answer - $600
Due to the GPO, her Social Security spousal benefit will be reduced by 2/3 of her state government
pension amount, or $400. $1,000 - $400 = $600.
pg. 4
