CRPC EXAM ACTUAL EXAM 2025-2026 180 QUESTIONS AND
CORRECT DETAILED ANSWERS WITH RATIONALES
(VERIFIED ANSWERS) |ALREADY GRADED A+
1.Which one of the following is not a key element of an investment policy?
A)
the acceptable risk tolerance level
B)
a provision for periodic review
C)
names of specific stocks to be in the portfolio
D)
a target asset allocation ...ANSWER..C)
names of specific stocks to be in the portfolio One way to remember the essential
elements of an investment policy is the acronym "GRASP" (Goals, Risk, Asset
Allocation, Strategies/Suitable Investment
2.Which of the following are correct statements about the capital utilization
strategy?
It produces an annual retirement income over a finite number of years.
Assuming the yield remains the same, the larger the retirement income that is
paid, the shorter the number of years over which it will be paid.
When the capital utilization approach is used, the planner must be careful in
making assumptions about the life expectancy of the client.
The effect of taxes on retirement savings and distributions should be considered
when the before-tax approach is used to calculate the future value of retirement
assets. ...ANSWER..All of the options are true.
3.Which one of the following is not a key element of an investment policy?
A)
the acceptable risk tolerance level
B)
a provision for periodic review
C)
names of specific stocks to be in the portfolio
D)
a target asset allocation ...ANSWER..C - Names of specific stocks to be in portfolio
,4.Which one of the following is a characteristic of Treasury inflation-protected
securities (TIPS)?
A)
Their returns are tied to the producer price index.
B)
They are issued with maturities up to 40 years.
C)
They are sold at a discount.
D)
The increase in principal is taxable each year. ...ANSWER..D - Increase in principal
is taxable each year
5.Assume your client has the following portfolio:
Stock Weight Beta BCD40% 1.15 EFG 25% .90 HIJ35%1.05
What is the overall weighted beta for this portfolio? ...ANSWER..C - 1.05
6.Your client owns a bond fund with a duration of 6.5. If interest rates increase
1.5%, what is the expected change in price for this fund?
A)
6.5% increase
B)
9.75% decrease
C)
6.5% decrease
D)
9.75% increase ...ANSWER..B - 9.75 decrease
7.The process of rebalancing is a key factor in
A)
dynamic asset allocation.
B)
tactical asset allocation.
C)
strategic asset allocation.
D)
institutional asset allocation. ...ANSWER..C)
strategic asset allocation.
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, 8.What does alpha tell you?
A)
The percentage by which a manager beat the market
B)
The percentage of return that can be attributed to systematic risk
C)
The percentage a manager over- or underperformed based on the amount of risk
taken
D)
The percentage of return that can be attributed to unsystematic risk
...ANSWER..C)
The percentage a manager over- or underperformed based on the amount of risk
taken
9.Which one of the following is used in fundamental analysis?
A)
Graphs
B)
Supply and demand of stocks
C)
Moving averages
D)
Financial statement ratios ...ANSWER..D)
Financial statement ratios Moving averages, graphs, and statistics regarding the
supply and demand of stocks are used by technicians. Financial statement ratios
are part of fundamental analysis.
10.When performing bond calculations, which of the following general
assumptions should be made unless stated otherwise?
A)
The coupon payment used in bond calculations is the annual amount.
B)
On a financial calculator, bonds are calculated in the Begin mode.
C)
The face value of the bond is $10,000.
D)
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CORRECT DETAILED ANSWERS WITH RATIONALES
(VERIFIED ANSWERS) |ALREADY GRADED A+
1.Which one of the following is not a key element of an investment policy?
A)
the acceptable risk tolerance level
B)
a provision for periodic review
C)
names of specific stocks to be in the portfolio
D)
a target asset allocation ...ANSWER..C)
names of specific stocks to be in the portfolio One way to remember the essential
elements of an investment policy is the acronym "GRASP" (Goals, Risk, Asset
Allocation, Strategies/Suitable Investment
2.Which of the following are correct statements about the capital utilization
strategy?
It produces an annual retirement income over a finite number of years.
Assuming the yield remains the same, the larger the retirement income that is
paid, the shorter the number of years over which it will be paid.
When the capital utilization approach is used, the planner must be careful in
making assumptions about the life expectancy of the client.
The effect of taxes on retirement savings and distributions should be considered
when the before-tax approach is used to calculate the future value of retirement
assets. ...ANSWER..All of the options are true.
3.Which one of the following is not a key element of an investment policy?
A)
the acceptable risk tolerance level
B)
a provision for periodic review
C)
names of specific stocks to be in the portfolio
D)
a target asset allocation ...ANSWER..C - Names of specific stocks to be in portfolio
,4.Which one of the following is a characteristic of Treasury inflation-protected
securities (TIPS)?
A)
Their returns are tied to the producer price index.
B)
They are issued with maturities up to 40 years.
C)
They are sold at a discount.
D)
The increase in principal is taxable each year. ...ANSWER..D - Increase in principal
is taxable each year
5.Assume your client has the following portfolio:
Stock Weight Beta BCD40% 1.15 EFG 25% .90 HIJ35%1.05
What is the overall weighted beta for this portfolio? ...ANSWER..C - 1.05
6.Your client owns a bond fund with a duration of 6.5. If interest rates increase
1.5%, what is the expected change in price for this fund?
A)
6.5% increase
B)
9.75% decrease
C)
6.5% decrease
D)
9.75% increase ...ANSWER..B - 9.75 decrease
7.The process of rebalancing is a key factor in
A)
dynamic asset allocation.
B)
tactical asset allocation.
C)
strategic asset allocation.
D)
institutional asset allocation. ...ANSWER..C)
strategic asset allocation.
2|Page
, 8.What does alpha tell you?
A)
The percentage by which a manager beat the market
B)
The percentage of return that can be attributed to systematic risk
C)
The percentage a manager over- or underperformed based on the amount of risk
taken
D)
The percentage of return that can be attributed to unsystematic risk
...ANSWER..C)
The percentage a manager over- or underperformed based on the amount of risk
taken
9.Which one of the following is used in fundamental analysis?
A)
Graphs
B)
Supply and demand of stocks
C)
Moving averages
D)
Financial statement ratios ...ANSWER..D)
Financial statement ratios Moving averages, graphs, and statistics regarding the
supply and demand of stocks are used by technicians. Financial statement ratios
are part of fundamental analysis.
10.When performing bond calculations, which of the following general
assumptions should be made unless stated otherwise?
A)
The coupon payment used in bond calculations is the annual amount.
B)
On a financial calculator, bonds are calculated in the Begin mode.
C)
The face value of the bond is $10,000.
D)
3|Page
