CRPC EXAM ACTUAL EXAM 2025-2026 180
QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONALES (VERIFIED ANSWERS) |ALREADY
GRADED A+
1.Mary Goodwin's financial situation is as follows:
Cash/cash equivalents $15,000
Short-term debts $8,000
Long-term debts $133,000
Tax expense $7,000
Auto note payments $4,000
Invested assets $60,000
Use assets $188,000
What is her net worth?
A)$111,000
B)$137,000
C)$122,000
D)$263,000 ...ANSWER..C
2.At the end of last year, Bill Greer has the following financial
information:
Salaries$70,000Auto payments$5,000Insurance
payments$3,800Food$8,000Credit card
balance$10,000Dividends$1,100Utilities$3,500Mortgage
payments$14,000Taxes$13,000Clothing$9,000Interest
income$2,100Checking
account$4,000Vacations$8,400Donations$5,800
What is the cash flow surplus or (deficit) for Bill?
A)
$2,700
B)
$6,500
C)
$10,700
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,D)
($500) ...ANSWER..A
3.Which of the following are correct statements about income
replacement percentages?
I.Income replacement percentages are typically much higher for those
with higher preretirement incomes.
II.Income replacement percentages vary between low-income and high-
income retirees.
III.Income replacement ratios should not be used as the only basis for
planning.
IV.Income replacement ratios are useful for younger clients as a guide
to their long-range planning and investing.
A)
I and IV
B)
I and II
C)
II and III
D)
II, III, and IV ...ANSWER..D
4.If Tom and Jenny want to save a fixed amount annually to accumulate
$2 million by their retirement date in 25 years (rather than an amount
that grows with inflation each year), what level annual end-of-year
savings amount will they need to deposit each year, assuming their
savings earn 7% annually?
A)
$55,692
B)
$31,621
C)
$29,552
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,D)
$54,130 ...ANSWER..B
5.Bill and Lisa Hahn have determined that they will need a monthly
income of $6,000 during retirement. They expect to receive Social
Security retirement benefits amounting to $3,500 per month at the
beginning of each month. Over the 12 remaining years of their
preretirement period, they expect to generate an average annual after-
tax investment return of 8%; during their 25-year retirement period,
they want to assume a 6% annual after-tax investment return
compounded monthly. They want to start their monthly retirement
withdrawals on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund
this income stream?
A)
$931,241
B)
$388,017
C)
$389,957
D)
$598,504 ...ANSWER..C
6.Chris and Eve Bronson have analyzed their current living expenses
and estimated their retirement income need, net of expected Social
Security benefits, to be $90,000 in today's dollars. They are confident
that they can earn a 7% after-tax return on their investments, and they
expect inflation to average 4% over the long term.
Determine the lump sum amount the Bronsons will need at the
beginning of retirement to fund their retirement income needs, using
the worksheet below.
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, (1) Adjust income deficit for inflation over the preretirement period:$
90,000present value of retirement income deficit25number of periods
until retirement4%% inflation rateFuture value of income deficit in first
retirement year$239,925(2) Determine retirement fund needed to
meet income deficit:$239,925payment (future value of income deficit
in first retirement year)30number of periods in retirement
The lump sum needed at the beginning of the Br ...ANSWER..D
7.Assume a client and investment professional have worked together
for several years. Recently, the client's personal and financial
circumstances have changed. According to the course materials, what is
the next asset management step that the investment professional
should take?
A)
make and implement recommendations
B)
gather data
C)
monitor performance
D)
analyze information ...ANSWER..B
8.Which one of the following is not a key attribute of an investment
policy?
A)
clearly defined
B)
realistic
C)
fluid
D)
long-term perspective ...ANSWER..C
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QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONALES (VERIFIED ANSWERS) |ALREADY
GRADED A+
1.Mary Goodwin's financial situation is as follows:
Cash/cash equivalents $15,000
Short-term debts $8,000
Long-term debts $133,000
Tax expense $7,000
Auto note payments $4,000
Invested assets $60,000
Use assets $188,000
What is her net worth?
A)$111,000
B)$137,000
C)$122,000
D)$263,000 ...ANSWER..C
2.At the end of last year, Bill Greer has the following financial
information:
Salaries$70,000Auto payments$5,000Insurance
payments$3,800Food$8,000Credit card
balance$10,000Dividends$1,100Utilities$3,500Mortgage
payments$14,000Taxes$13,000Clothing$9,000Interest
income$2,100Checking
account$4,000Vacations$8,400Donations$5,800
What is the cash flow surplus or (deficit) for Bill?
A)
$2,700
B)
$6,500
C)
$10,700
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,D)
($500) ...ANSWER..A
3.Which of the following are correct statements about income
replacement percentages?
I.Income replacement percentages are typically much higher for those
with higher preretirement incomes.
II.Income replacement percentages vary between low-income and high-
income retirees.
III.Income replacement ratios should not be used as the only basis for
planning.
IV.Income replacement ratios are useful for younger clients as a guide
to their long-range planning and investing.
A)
I and IV
B)
I and II
C)
II and III
D)
II, III, and IV ...ANSWER..D
4.If Tom and Jenny want to save a fixed amount annually to accumulate
$2 million by their retirement date in 25 years (rather than an amount
that grows with inflation each year), what level annual end-of-year
savings amount will they need to deposit each year, assuming their
savings earn 7% annually?
A)
$55,692
B)
$31,621
C)
$29,552
2|Page
,D)
$54,130 ...ANSWER..B
5.Bill and Lisa Hahn have determined that they will need a monthly
income of $6,000 during retirement. They expect to receive Social
Security retirement benefits amounting to $3,500 per month at the
beginning of each month. Over the 12 remaining years of their
preretirement period, they expect to generate an average annual after-
tax investment return of 8%; during their 25-year retirement period,
they want to assume a 6% annual after-tax investment return
compounded monthly. They want to start their monthly retirement
withdrawals on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund
this income stream?
A)
$931,241
B)
$388,017
C)
$389,957
D)
$598,504 ...ANSWER..C
6.Chris and Eve Bronson have analyzed their current living expenses
and estimated their retirement income need, net of expected Social
Security benefits, to be $90,000 in today's dollars. They are confident
that they can earn a 7% after-tax return on their investments, and they
expect inflation to average 4% over the long term.
Determine the lump sum amount the Bronsons will need at the
beginning of retirement to fund their retirement income needs, using
the worksheet below.
3|Page
, (1) Adjust income deficit for inflation over the preretirement period:$
90,000present value of retirement income deficit25number of periods
until retirement4%% inflation rateFuture value of income deficit in first
retirement year$239,925(2) Determine retirement fund needed to
meet income deficit:$239,925payment (future value of income deficit
in first retirement year)30number of periods in retirement
The lump sum needed at the beginning of the Br ...ANSWER..D
7.Assume a client and investment professional have worked together
for several years. Recently, the client's personal and financial
circumstances have changed. According to the course materials, what is
the next asset management step that the investment professional
should take?
A)
make and implement recommendations
B)
gather data
C)
monitor performance
D)
analyze information ...ANSWER..B
8.Which one of the following is not a key attribute of an investment
policy?
A)
clearly defined
B)
realistic
C)
fluid
D)
long-term perspective ...ANSWER..C
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