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CRPC FINAL EXAM

ACTUAL NEWEST EXAM FORM A AND B

COMPLETE 500 QUESTIONS WITH DETAILED VERIFIED

ANSWERS (100% CORRECT ANSWERS) ALREADY GRADED

A+

FORM A 1 / 4

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317 1.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

• analyze information

B)gather data C)make and implement recommendations D)monitor performance Answer --B When the client's circumstances change, the asset management process goes back to the data gathering step in the process.

2.When the client's circumstances change, the asset management process goes back to the data gathering step in

the process.:

• realistic

B)clearly defined C)long-term perspective D)fluid Answer --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. 2 / 4

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317 3.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 port- folio.

• tactical.

B)alpha.C)core/satellite.D)strategic.Answer --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.

4.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

• 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.Answer --A The asset with the lowest correlation provides the most diversification.Therefore, gold provides more diversification than any of the other assets.

5.Mary Goodwin's financial situation is as follows: 3 / 4

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317 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 Answer $122,000 Assets = $263,000; liabilities = $141,000, so net worth is $122,000.Taxes and auto note payments appear on the cash flow statement.

6.For the year ending December 31, XXXX, Bill Greer has the

following finan- cial information:

Salaries$70,000Auto payments$5,000Insurance$3,800Food$8,000Cred- it card balance$10,000Dividends$1,100Utilities$3,500Mortgage pay- ments$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 Answer $2,700 Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 +

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