CRPC EXAM ACTUAL EXAM 180 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED A+<\/p>\n\n\n\n
CRPC EXAM 2023-2024 ACTUAL EXAM 180
QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONALES (VERIFIED ANSWERS)
|ALREADY GRADED A+
When the client’s circumstances change, the asset management process
goes back to the data gathering step in the process. – A) realistic
B) clearly defined
C) long-term perspective
D) fluid
–D
An investment policy provides guidelines that are standards to be
followed. If they are fluid, they are ever-changing and therefore would
be difficult to implement and would provide inconsistency in the
management of the portfolio.
An investment policy provides guidelines that are standards to be
followed. If they are fluid, they are ever-changing and therefore would
be difficult to implement and would provide inconsistency in the
management of the portfolio. – A) tactical.
B) alpha.
C) core\/satellite.
D) strategic.<\/p>\n\n\n\n
–B
Alpha is not an asset allocation strategy, but a way to measure a
portfolio manager’s return relative to the amount of risk that has been
taken.
Assume the following asset classes have the correlations to long-term
government bonds shown below:
Treasury bills:.12 Gold:-.25 Large stocks:.22 Small stocks:.17
Which one of the following correctly states the impact of diversification
on long-term government bonds? – A) Gold provides more
diversification than large stocks.
B) Small stocks provide more diversification than Treasury bills.
C) Treasury bills provide more diversification than gold.
D) Large stocks provide more diversification than small stocks.
–A
The asset with the lowest correlation provides the most
diversification. Therefore, gold provides more diversification than
any of the other assets.
What is the price of a bond with a 7% coupon, a $1,000 par value, and a
maturity of 20 years if the market interest rate for similar bonds is 6%? –
A) $1,074.39
B) $893.23
C) $1,000.00
D) $1,115.57<\/p>\n\n\n\n
–D
Set the calculator for 2 P\/YR and use the END mode. The inputs then
are as follows: 1,000 [FV], 35 [PMT], 20 [SHIFT] [N] = 40, 6 [I\/YR],
and solve for PV = $1,115.57. Note: The $35 payment is the semiannual
payment of the bond. This is computed by taking the 7% coupon rate the
par value of $1,000 = $70 and divide that by 2 to get the semiannual
interest paid, in this case $35. Also, the yield to maturity (YTM) is less
than the coupon rate, thus the bond must be selling at a premium.
This year, your 63-year-old client had $17,025 of earned income and
$30,000 of investment income. He was also drawing Social Security
benefits. Which one of the following correctly describes the impact on
his Social Security benefits? – — There is no reduction to his benefits.
The client’s earnings (earned income) are below the allowable limit for
the current year ($18,240 for 2020). Remember that according to the
work penalty rule, only earned income is counted toward the “allowable
limit.”
Which one of the following is a correct statement about the amount of
Social Security retirement benefits available when a fully insured
worker’s retirement benefit begins at full retirement age (FRA)? – A) If
the spouse of the worker has attained FRA and is entitled to benefits on
their earning record, the benefit is the lesser of 100% of the spouse’s
own PIA or 50% of the worker’s PIA.
B) If the spouse is at or above his or her full retirement age when
commencing Social Security benefits, the spouse will receive at least
50% of the worker’s PIA.<\/p>\n\n\n\n
C) A 63-year-old spouse of the retired worker will receive at least 50%
of the worker’s PIA.
D) The worker will receive 80% of his or her primary insurance amount
(PIA).
–B
The spouse who starts receiving benefits at his or her Social Security full
retirement age will receive 50% of the worker’s PIA unless the spouse’s
Social Security benefit is higher based on his or her own earnings.
(Note: The FRA began increasing for those workers who reached age 62
in the year 2000.) At full retirement age the worker will receive 100% of
PIA. The 50% of PIA is reduced for each month the spouse is under full
retirement age when benefits begin. A spouse who is at FRA and entitled
to benefits on their own working record would receive the higher of
100% of their own PIA or 50% of the spouse’s PIA.
Which one of the following is correct regarding most types of tax
exempt interest and the taxation of Social Security benefits? – A) 85% of
the tax-exempt interest is included in the computation of the taxation of
Social Security benefits.
B) All of the tax-exempt interest is included in the computation of the
taxation of Social Security benefits.
C) None of the tax-exempt interest is included in the computation of the
taxation of Social Security benefits.
D) 50% of the tax-exempt interest is included in the computation of the
taxation of Social Security benefits.
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