FP511 Final exam with correct detailed
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answers
Which |of |the |following |activities |would |be |appropriate |if |you |were |establishing |and |defining |
the |client-planner |relationship |or |gathering |information |necessary |to |fulfill |the |engagement?
I. |Collecting |personal |financial |information
II. |Inquiring |about |the |number |of |dependents
III. |Inquiring |about |the |age |or |dates |of |birth |of |dependents
IV. |Determining |which |stocks |to |purchase |for |the |client's |investment |portfolio |- |correct |answer
|The |correct |answer |is |I, |II, |and |III. |Establishing |and |defining |the |client-planner |relationship |
does |not |include |determining |which |stocks |or |investments |to |purchase. |This |occurs |in |the |
fourth |phase |of |the |financial |planning |process, |developing |the |recommendations.
Which |of |the |following |CFP® |certificants |would |likely |be |considered |to |be |engaged |in |financial |
planning |or |the |material |elements |of |financial |planning?
I. |Lance, |who |reviews |a |life |insurance |sales |brochure |with |his |client, |Arthur, |and |completes |a |
variable |life |insurance |application
II. |Nadia, |who |conducts |comprehensive |data |gathering |regarding |Jason's |investments, |life |
insurance, |retirement |plans, |wills, |and |trusts |and |makes |recommendations |for |him |- |correct |
answer |The |correct |answer |is |II |only. |Because |Nadia's |services |involve |several |of |the |financial |
planning |subject |areas |and |she |is |involved |in |the |elements |of |financial |planning, |she |is |likely |
providing |financial |planning. |Lance's |service |to |Arthur |is |limited, |and |the |engagement |would |
likely |not |be |considered |financial |planning.
According |to |CFP |Board |Code |of |Ethics, |Connor, |a |CFP® |professional, |is |responsible |for |which |
of |the |following?
I. |Acting |in |the |client's |best |interests
II. |Avoiding |or |disclosing |and |managing |conflicts |of |interest
III. |Acting |with |honesty, |integrity, |competence, |and |diligence
IV. |Maintaining |the |confidentiality |and |protect |the |privacy |of |client |information |- |correct |
answer |The |correct |answer |is |I, |II, |III, |and |IV. |A |CFP® |professional |must
,Act |with |honesty, |integrity, |competence, |and |diligence.
Act |in |the |client's |best |interests.
Exercise |due |care.
Avoid |or |disclose |and |manage |conflicts |of |interest.
Maintain |the |confidentiality |and |protect |the |privacy |of |client |information.
Act |in |a |manner |that |reflects |positively |on |the |financial |planning |profession |and |CFP® |
certification.
Amanda, |a |CFP® |professional, |is |enjoying |an |afternoon |at |her |son's |school |playground |when |
she |is |approached |by |Tracy, |a |fellow |parent |and |teacher |at |a |local |elementary |school. |Their |
conversation |covers |specifics |about |Tracy's |personal |and |financial |situation, |with |emphasis |on |
a |recommended |investment |strategy |for |her |403(b) |account. |Amanda |is |aware |that |she |is |
providing |Financial |Advice |to |Tracy. |Identify |the |correct |application |of |rules |from |the |Code |and
|Standards |based |on |Amanda |and |Tracy's |interaction. |- |correct |answer |The |correct |answer |is |
although |only |Financial |Advice |has |been |determined, |Amanda |must |uphold |her |Fiduciary |Duty
|and |must |follow |the |Code |of |Ethics. |As |a |CFP® |professional, |Amanda |is |obligated |to |uphold |
the |Code |of |Ethics. |In |addition, |since |Financial |Advice |is |occurring, |Amanda |must |act |as |a |
Fiduciary, |in |the |best |interest |of |Tracy. |The |introduction |of |the |Code |and |Standards |specifically
|states |"The |Code |of |Ethics |applies |at |all |times, |and |sets |forth |principles |that |guide |the |
behavior |of |CFP® |professionals, |with |elaboration |provided |in |the |Standards."
Bill |and |Sophia |have |recently |retired |and |want |to |travel |to |Europe |and |then |volunteer |for |local
|mission |work. |They |would |also |like |to |meet |with |Humphrey, |their |financial |planner, |to |discuss |
charitable |contributions |they |would |like |to |make |to |these |local |missions. |Humphrey |should |
determine |Bill |and |Sophia's |life |cycle |phase |to |be |- |correct |answer |The |correct |answer |is |the |
distribution |phase. |The |distribution/gifting |phase |begins |subtly |when |a |couple |realizes |that |
they |can |afford |to |spend |on |things |they |never |believed |possible. |The |asset |accumulation |and |
conservation/protection |phases |make |this |phase |possible. |For |many |people, |there |is |a |period |
when |they |are |being |influenced |by |all |three |phases |simultaneously, |though |not |necessarily |to |
the |same |degree.
Whitney |is |designing |her |new |email |template |which |will |reflect |her |recent |certification |as |a |
CFP® |professional. |Under |her |name, |she |has |identified |herself |as |a |CFP™. |In |a |tagline |at |the |
bottom |of |the |template, |she |advertises |herself |as |a |"CFP® |expert." |According |to |CFP |Board's |
guidelines |regarding |how |the |CFP®" |marks |may |be |used, |which |of |the |following |is |CORRECT?
, I. |Whitney |has |appropriately |identified |herself |as |a |CFP™.
II. |Advertising |herself |as |a |CFP® |expert |is |prohibited |by |CFP |Board. |- |correct |answer |The |
correct |answer |is |II |only. |Statement |I |is |incorrect. |Although, |Whitney |can |identify |herself |as |a |
CFP®, |it |must |be |done |behind |her |name, |not |under |it. |If |Whitney |wants |to |identify |herself |
under |her |name, |she |should |do |so |as |a |™. |Statement |II |is |correct. |"CFP®" |must |always |be |used
|with |one |of |CFP |Board's |approved |nouns |("certificant", |"professional", |"practitioner",
|"certification", |"mark", |or |"exam") |unless |directly |following |the |name |of |the |individual |
certified |by |CFP |Board. |Here, |it |can |be |used |alone.
Maxine, |age |57, |would |like |to |retire |in |10 |years. |Currently, |her |debt |is |decreasing |as |her |cash |
flow |and |net |worth |are |steadily |increasing. |Based |on |Maxine's |current |financial |life |cycle |
phase, |which |of |the |following |goals |is |she |likely |to |have? |- |correct |answer |The |correct |answer |
is |long-term |goals, |such |as |investing |for |retirement. |Maxine |is |in |the |conservation/protection |
phase |of |the |financial |life |cycle. |As |such, |her |goals |are |likely |longer-term |goals, |such |as |
investing |to |provide |for |future |retirement |income. |In |the |accumulation |phase |of |the |financial |
life |cycle, |clients |have |only |limited |discretionary |income |and, |as |a |result, |they |are |likely |to |
focus |on |short-term, |cost-of-living |goals. |Finally, |in |the |distribution/gifting |phase, |estate |
planning |and |capital |preservation |are |usually |most |important.
Blanca, |a |CFP® |professional, |has |recently |entered |into |a |financial |planning |engagement |with |
Simon. |As |his |financial |planner, |which |of |the |following |are |Blanca's |roles?
I. |Analyzing |Simon's |current |financial |status
II. |Assisting |Simon |in |implementing |the |financial |plan
III. |Helping |Simon |identify |financial |goals |and |objectives |- |correct |answer |The |correct |answer |is
|I, |II, |and |III. |The |financial |planner |is |responsible |for |analyzing |clients' |financial |status, |assisting |
clients |in |implementing |their |financial |plans, |and |making |recommendations |based |on |the |
client's |goals |and |objectives.
Candice |has |referred |Rochelle, |a |CFP® |professional, |to |her |brother, |Nelson. |In |their |initial |
meeting, |Rochelle |explains |how |she |can |help |Nelson |develop |a |comprehensive |financial |plan. |
Which |of |the |following |would |be |Rochelle's |roles |in |a |client-planner |relationship |with |Nelson?
I. |Assisting |Nelson |in |identifying |his |goals
II. |Analyzing |Nelson's |current |financial |status
III. |Recommending |strategies |that |will |meet |Nelson's |business |goals
| | | | | |
answers
Which |of |the |following |activities |would |be |appropriate |if |you |were |establishing |and |defining |
the |client-planner |relationship |or |gathering |information |necessary |to |fulfill |the |engagement?
I. |Collecting |personal |financial |information
II. |Inquiring |about |the |number |of |dependents
III. |Inquiring |about |the |age |or |dates |of |birth |of |dependents
IV. |Determining |which |stocks |to |purchase |for |the |client's |investment |portfolio |- |correct |answer
|The |correct |answer |is |I, |II, |and |III. |Establishing |and |defining |the |client-planner |relationship |
does |not |include |determining |which |stocks |or |investments |to |purchase. |This |occurs |in |the |
fourth |phase |of |the |financial |planning |process, |developing |the |recommendations.
Which |of |the |following |CFP® |certificants |would |likely |be |considered |to |be |engaged |in |financial |
planning |or |the |material |elements |of |financial |planning?
I. |Lance, |who |reviews |a |life |insurance |sales |brochure |with |his |client, |Arthur, |and |completes |a |
variable |life |insurance |application
II. |Nadia, |who |conducts |comprehensive |data |gathering |regarding |Jason's |investments, |life |
insurance, |retirement |plans, |wills, |and |trusts |and |makes |recommendations |for |him |- |correct |
answer |The |correct |answer |is |II |only. |Because |Nadia's |services |involve |several |of |the |financial |
planning |subject |areas |and |she |is |involved |in |the |elements |of |financial |planning, |she |is |likely |
providing |financial |planning. |Lance's |service |to |Arthur |is |limited, |and |the |engagement |would |
likely |not |be |considered |financial |planning.
According |to |CFP |Board |Code |of |Ethics, |Connor, |a |CFP® |professional, |is |responsible |for |which |
of |the |following?
I. |Acting |in |the |client's |best |interests
II. |Avoiding |or |disclosing |and |managing |conflicts |of |interest
III. |Acting |with |honesty, |integrity, |competence, |and |diligence
IV. |Maintaining |the |confidentiality |and |protect |the |privacy |of |client |information |- |correct |
answer |The |correct |answer |is |I, |II, |III, |and |IV. |A |CFP® |professional |must
,Act |with |honesty, |integrity, |competence, |and |diligence.
Act |in |the |client's |best |interests.
Exercise |due |care.
Avoid |or |disclose |and |manage |conflicts |of |interest.
Maintain |the |confidentiality |and |protect |the |privacy |of |client |information.
Act |in |a |manner |that |reflects |positively |on |the |financial |planning |profession |and |CFP® |
certification.
Amanda, |a |CFP® |professional, |is |enjoying |an |afternoon |at |her |son's |school |playground |when |
she |is |approached |by |Tracy, |a |fellow |parent |and |teacher |at |a |local |elementary |school. |Their |
conversation |covers |specifics |about |Tracy's |personal |and |financial |situation, |with |emphasis |on |
a |recommended |investment |strategy |for |her |403(b) |account. |Amanda |is |aware |that |she |is |
providing |Financial |Advice |to |Tracy. |Identify |the |correct |application |of |rules |from |the |Code |and
|Standards |based |on |Amanda |and |Tracy's |interaction. |- |correct |answer |The |correct |answer |is |
although |only |Financial |Advice |has |been |determined, |Amanda |must |uphold |her |Fiduciary |Duty
|and |must |follow |the |Code |of |Ethics. |As |a |CFP® |professional, |Amanda |is |obligated |to |uphold |
the |Code |of |Ethics. |In |addition, |since |Financial |Advice |is |occurring, |Amanda |must |act |as |a |
Fiduciary, |in |the |best |interest |of |Tracy. |The |introduction |of |the |Code |and |Standards |specifically
|states |"The |Code |of |Ethics |applies |at |all |times, |and |sets |forth |principles |that |guide |the |
behavior |of |CFP® |professionals, |with |elaboration |provided |in |the |Standards."
Bill |and |Sophia |have |recently |retired |and |want |to |travel |to |Europe |and |then |volunteer |for |local
|mission |work. |They |would |also |like |to |meet |with |Humphrey, |their |financial |planner, |to |discuss |
charitable |contributions |they |would |like |to |make |to |these |local |missions. |Humphrey |should |
determine |Bill |and |Sophia's |life |cycle |phase |to |be |- |correct |answer |The |correct |answer |is |the |
distribution |phase. |The |distribution/gifting |phase |begins |subtly |when |a |couple |realizes |that |
they |can |afford |to |spend |on |things |they |never |believed |possible. |The |asset |accumulation |and |
conservation/protection |phases |make |this |phase |possible. |For |many |people, |there |is |a |period |
when |they |are |being |influenced |by |all |three |phases |simultaneously, |though |not |necessarily |to |
the |same |degree.
Whitney |is |designing |her |new |email |template |which |will |reflect |her |recent |certification |as |a |
CFP® |professional. |Under |her |name, |she |has |identified |herself |as |a |CFP™. |In |a |tagline |at |the |
bottom |of |the |template, |she |advertises |herself |as |a |"CFP® |expert." |According |to |CFP |Board's |
guidelines |regarding |how |the |CFP®" |marks |may |be |used, |which |of |the |following |is |CORRECT?
, I. |Whitney |has |appropriately |identified |herself |as |a |CFP™.
II. |Advertising |herself |as |a |CFP® |expert |is |prohibited |by |CFP |Board. |- |correct |answer |The |
correct |answer |is |II |only. |Statement |I |is |incorrect. |Although, |Whitney |can |identify |herself |as |a |
CFP®, |it |must |be |done |behind |her |name, |not |under |it. |If |Whitney |wants |to |identify |herself |
under |her |name, |she |should |do |so |as |a |™. |Statement |II |is |correct. |"CFP®" |must |always |be |used
|with |one |of |CFP |Board's |approved |nouns |("certificant", |"professional", |"practitioner",
|"certification", |"mark", |or |"exam") |unless |directly |following |the |name |of |the |individual |
certified |by |CFP |Board. |Here, |it |can |be |used |alone.
Maxine, |age |57, |would |like |to |retire |in |10 |years. |Currently, |her |debt |is |decreasing |as |her |cash |
flow |and |net |worth |are |steadily |increasing. |Based |on |Maxine's |current |financial |life |cycle |
phase, |which |of |the |following |goals |is |she |likely |to |have? |- |correct |answer |The |correct |answer |
is |long-term |goals, |such |as |investing |for |retirement. |Maxine |is |in |the |conservation/protection |
phase |of |the |financial |life |cycle. |As |such, |her |goals |are |likely |longer-term |goals, |such |as |
investing |to |provide |for |future |retirement |income. |In |the |accumulation |phase |of |the |financial |
life |cycle, |clients |have |only |limited |discretionary |income |and, |as |a |result, |they |are |likely |to |
focus |on |short-term, |cost-of-living |goals. |Finally, |in |the |distribution/gifting |phase, |estate |
planning |and |capital |preservation |are |usually |most |important.
Blanca, |a |CFP® |professional, |has |recently |entered |into |a |financial |planning |engagement |with |
Simon. |As |his |financial |planner, |which |of |the |following |are |Blanca's |roles?
I. |Analyzing |Simon's |current |financial |status
II. |Assisting |Simon |in |implementing |the |financial |plan
III. |Helping |Simon |identify |financial |goals |and |objectives |- |correct |answer |The |correct |answer |is
|I, |II, |and |III. |The |financial |planner |is |responsible |for |analyzing |clients' |financial |status, |assisting |
clients |in |implementing |their |financial |plans, |and |making |recommendations |based |on |the |
client's |goals |and |objectives.
Candice |has |referred |Rochelle, |a |CFP® |professional, |to |her |brother, |Nelson. |In |their |initial |
meeting, |Rochelle |explains |how |she |can |help |Nelson |develop |a |comprehensive |financial |plan. |
Which |of |the |following |would |be |Rochelle's |roles |in |a |client-planner |relationship |with |Nelson?
I. |Assisting |Nelson |in |identifying |his |goals
II. |Analyzing |Nelson's |current |financial |status
III. |Recommending |strategies |that |will |meet |Nelson's |business |goals
