FINANCIAL PROFESSIONAL CFP FP 511 EXAM ACTUAL

FINANCIAL PROFESSIONAL CFP (FP 511 EXAM ( ACTUAL

WITH QUESTIONS AND VERIFIED CORRECT

ANSWERS ALREADY A+ GRADE

Noah grew up in the period following the Depression and is very conservative with his finances. He has individual accounts at three separate federally chartered banks with balances of $265,000, $300,000, and $200,000. What is the total amount insured by the Federal Deposit Insurance Corporation (FDIC)?

• ---Answers___$700,000

Noah grew up in the period following the Depression and is very conservative with his finances. He has individual accounts at three separate federally chartered banks with balances of $265,000, $300,000, and $200,000. What is the total amount insured by the Federal Deposit Insurance Corporation (FDIC)

Which of the following statements regarding securities and insurance regulation legislation are CORRECT?

• The Securities Act of 1933 requires the registration of new

issues of securities or issues in the primary market.II. The Securities Investor Protection Act of 1970 is designed to protect individual investors from losses as a result of brokerage house failures. 1 / 4

III. The Investment Company Act of 1940 assures investor safety of investment value in companies engaged primarily in investing, reinvesting, and trading in securities.IV. The Investment Advisers Act of 1940 requires that persons or firms advising others regarding securities must register with the Securities and Exchange Commission - --- Answers___The answer is I, II, and IV. Investors are not assured of safety when investing and trading in securities.

Which of the following statements regarding the National Credit Union Share Insurance Fund (NCUSIF) are CORRECT?

• The NCUSIF is backed by the full faith and credit of the U.S.

government.II. The fund is administered by the National Credit Union Administration (NCUA).III. Up to $500,000 of a member's account balances are insured by the NCUSIF.IV. The NCUSIF insures member accounts of all federal credit unions. - ---Answers___The answer is I, II, and IV.

The NCUSIF insures member accounts of all federal and most state-chartered credit unions up to $250,000. All of the other statements are correct

Which of the following statements regarding the Financial Industry Regulatory Authority (FINRA) is CORRECT?

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• FINRA is a self-regulatory organization.

II.FINRA has primary authority regarding the registration of investment advisers. - ---Answers___I only - The SEC has primary authority regarding the registration of investment advisers

Terry wants to save $1 million (in today's dollars) for his retirement, which is 20 years away, by depositing money in his brokerage account at the end of every year using the serial payment method. He assumes he can earn 7% on his investments and that inflation will average 3% over the 20- year savings period. How much does Terry need to deposit at the end of the first year to meet his goal? - ---Answers___The answer is $35,009.39. The required payment at the end of the first year is $35,009.39. The keystrokes on the HP 10bII/HP

10bII+ are as follows: 1,000,000, FV; [(1.07 ÷ 1.03) − 1 × 100] =

3.8835, I/YR; 20, N; Solve for PMT = -33,989.7035; PMT of - 33,989.7035 × 1.03 = -35,009.3946, or $35,009.39.

Don't have to discount the payment for year 1

Clayton wishes to start saving for a lump-sum amount of $75,000 (in today's dollars) that is needed in seven years. He assumes an inflation rate of 2% and an investment rate of return of 9%. Assume Clayton wishes to save annually using the level payment method. What is his required deposit?(Round to the nearest dollar.) - ---Answers___The answer is $9,364. The required annual savings deposit under the level payment approach is $9,364, with keystrokes as follows on the HP: 10bII/HP 10bII+: 3 / 4

Step 1: Inflate the lump-sum in today's dollars into the future

need.

75,000, +/−, PV

7, N

2, I/YR

Solve for FV = 86,151.4251 Solve for the required annual level payment using the inflated lump-sum value.(Be sure to clear your calculator)

SHIFT, C ALL

FV = 86,151.4251

7, N

9, I/YR

Solve for PMT = -9,363.8429, or $9,364 (rounded)

Mary Franks filed her 2016 income tax return on April 3, 2017.The IRS has recently determined that she worked a part-time job, but the employer failed to provide Mary with a W-2. Mary honestly did not realize that she was required to report the income, because she did not receive a W-2. The IRS has determined that her negligent failure to report the income resulted in an additional income tax liability of $2,000.What is Mary's tax penalty? - ---Answers___The answer is $400. The negligence penalty is 20% of the deficiency due to the taxpayer's negligence. For the $2,000 tax deficiency, 20% results in a negligence penalty of $400. It may be argued that the failure to report the income was fraud, but the fact pattern states that the act was merely negligent.

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