Test your basic knowledge |

CFP: Certified Financial Planner

Subjects : certifications, cfp, business-skills

Instructions:

Answer 46 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. After-tax Return
Total Return (1 - tax bracket)
EBIT/I (Where I = Interest Expense)
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
Earnings Before Interest & Taxes

2. Social Styles
Price Earnings Growth ratio; P/E divided by projected earnings growth
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
Explanatory - Interpretive - Reassuring - Suggestive
driving - expressive - amiable - analytical

3. Real Return (inflation adjusted); NR = Nominal Return; CCL = Change in Cost of Living (inflation rate)
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
current assets - current liabilities
Sales / Average Total Assets
[(1+ NR) / (1 + CCL)] - 1

4. Sustainable Growth Rate
driving - expressive - amiable - analytical
Total Assets / Equity
g = ROE X b - where b is equal to the retention ratio
EBIT/I (Where I = Interest Expense)

5. The payout ratio
dividends / earnings
EBIT/I (Where I = Interest Expense)
[(1+ NR) / (1 + CCL)] - 1
Tax Deduction * marginal tax rate

6. Total Debt to Equity ratio
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
Total Liabilities / Equity
Price Earnings Growth ratio; P/E divided by projected earnings growth
Net Worth/Total Assets

7. Equivalent Tax Credit
1 - the payout ratio
Price Earnings Growth ratio; P/E divided by projected earnings growth
Tax Deduction * marginal tax rate
Earnings Before Interest & Taxes

8. Holding Period Return
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
(Mortgage+Debt Repayment)/Net Income
(P1 + D - P0)/P0
Price Earnings Growth ratio; P/E divided by projected earnings growth

9. Quick Ratio (aka Acid test)
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
(P1 + D - P0)/P0
(current assets - inventory) / current liabilities
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence

10. Liquidity Ratio
Tax Free Yield/(1 - Tax Bracket)
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
Price Earnings Growth ratio; P/E divided by projected earnings growth
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n

11. After-tax Yield
Total Long-term Debt / Equity
1 - the payout ratio
current assets - current liabilities
Tax Free Yield/(1 - Tax Bracket)

12. Solvency Ratio
Tax Free Yield/(1 - Tax Bracket)
Net Worth/Total Assets
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
current assets / current liabilities

13. Asset Turnover Ratio
Sales / Average Total Assets
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization
Explanatory - Interpretive - Reassuring - Suggestive

14. Types of Understanding Responses Associated With Active Listening
current assets - current liabilities
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization
P*(1+g)/(k-g) P=div per share divided by other div
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income

15. Cash Ratio
(cash + marketable securities) / current liabilities
EAT / Sales
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards

16. Equivalent Tax Deduction
current assets / current liabilities
EBIT/I (Where I = Interest Expense)
(cash + marketable securities) / current liabilities
Tax Credit/marginal tax rate

17. financial life cycle
Earnings Before Interest & Taxes
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
early career (age 25 or younger to age 35) - career development (age 35 to age 50) - peak accumulation (age 50 to ages 58-62) - preretirement (3 to 6 years prior to planned retirement) - retirement (ages 62-66 and older)

18. Savings Ratio
[(1+ NR) / (1 + CCL)] - 1
(P1 + D - P0)/P0
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income

19. Opportunities in Financial Planning
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
assets less liabilities - divided by the number of shares of common stock of a company
RIVETC - Rising median age - Increased impact of dual-income families - Volatility of financial conditions - Evolving tax environment - Technological change - Concern over fraud and firm failure
Tax Deduction * marginal tax rate

20. Types of Leading Responses
Net Income/Equity
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
(1/T)(r1+r2+...+rT)
Explanatory - Interpretive - Reassuring - Suggestive

21. Gross Investment income
current assets / current liabilities
taxable interest - non-qual. divs - short-term cap. gains
EAT / Sales
Total Return (1 - tax bracket)

22. Net After Tax Profit Margin
Total Long-term Debt / Equity
Total Return (1 - tax bracket)
EAT / Sales
1 - the payout ratio

23. Net Investment Income
Total Liabilities / Equity
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
early career (age 25 or younger to age 35) - career development (age 35 to age 50) - peak accumulation (age 50 to ages 58-62) - preretirement (3 to 6 years prior to planned retirement) - retirement (ages 62-66 and older)
Tax Deduction * marginal tax rate

24. Net Cash Flow
Price/Earnings per share
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
Sources of Funds-Use of Funds or Money in- Money out
Earnings Before Interest & Taxes

25. CFP Ethical principles
current assets - current liabilities
g = ROE X b - where b is equal to the retention ratio
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence
Net Income/Equity

26. Debt to Equity ratio
(Mortgage+Debt Repayment)/Net Income
Total Long-term Debt / Equity
taxable interest - non-qual. divs - short-term cap. gains
Tax Free Yield/(1 - Tax Bracket)

27. EBIT
Earnings Before Interest & Taxes
Tax Credit/marginal tax rate
Total Liabilities / Equity
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards

28. Arithmetic Mean Return; T = Terminal period; good for comparing different investments
Net Worth/Total Assets
Sources of Funds-Use of Funds or Money in- Money out
(1/T)(r1+r2+...+rT)
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits

29. Attributes of Effective Advisor communiations
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
Earnings After Taxes
P*(1+g)/(k-g) P=div per share divided by other div
Tax Credit/marginal tax rate

30. aka Net Income
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence
current assets / current liabilities
Earnings After Taxes
(Mortgage+Debt Repayment)/Net Income

31. Current Yield of a bond

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

32. PEG ratio
Price Earnings Growth ratio; P/E divided by projected earnings growth
EBIT/I (Where I = Interest Expense)
early career (age 25 or younger to age 35) - career development (age 35 to age 50) - peak accumulation (age 50 to ages 58-62) - preretirement (3 to 6 years prior to planned retirement) - retirement (ages 62-66 and older)
current assets / current liabilities

33. Assets to Equity ratio
driving - expressive - amiable - analytical
Sales / Average Total Assets
Total Assets / Equity
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)

34. Major CFP Planning Areas
(1/T)(r1+r2+...+rT)
Explanatory - Interpretive - Reassuring - Suggestive
Earnings After Taxes
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits

35. Current Ratio
current assets / current liabilities
EBIT/I (Where I = Interest Expense)
early career (age 25 or younger to age 35) - career development (age 35 to age 50) - peak accumulation (age 50 to ages 58-62) - preretirement (3 to 6 years prior to planned retirement) - retirement (ages 62-66 and older)
driving - expressive - amiable - analytical

36. financial planning pyramid
1 - the payout ratio
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
assets less liabilities - divided by the number of shares of common stock of a company
Dollars of coupon interest per year/Bond's current market price

37. 'normal' ratio
Earnings Before Interest & Taxes
Total Liabilities / Equity
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization
P*(1+g)/(k-g) P=div per share divided by other div

38. Present value of a Bond
current assets / current liabilities
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
Total Liabilities / Equity
dividends / earnings

39. Domains of a CFP
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
Earnings Before Interest & Taxes
current assets - current liabilities

40. Book Value (of company stock)
taxable interest - non-qual. divs - short-term cap. gains
assets less liabilities - divided by the number of shares of common stock of a company
Total Return (1 - tax bracket)
Sales / Average Total Assets

41. The retention ratio
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
Sources of Funds-Use of Funds or Money in- Money out
driving - expressive - amiable - analytical
1 - the payout ratio

42. ROE (Return On Equity)
early career (age 25 or younger to age 35) - career development (age 35 to age 50) - peak accumulation (age 50 to ages 58-62) - preretirement (3 to 6 years prior to planned retirement) - retirement (ages 62-66 and older)
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
EAT / Sales
Net Income/Equity

43. P/E ratio
Sales / Average Total Assets
(cash + marketable securities) / current liabilities
Price/Earnings per share
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization

44. Debt Service Ratio
(Mortgage+Debt Repayment)/Net Income
current assets - current liabilities
driving - expressive - amiable - analytical
(current assets - inventory) / current liabilities

45. Times Interest Earned
RIVETC - Rising median age - Increased impact of dual-income families - Volatility of financial conditions - Evolving tax environment - Technological change - Concern over fraud and firm failure
Explanatory - Interpretive - Reassuring - Suggestive
taxable interest - non-qual. divs - short-term cap. gains
EBIT/I (Where I = Interest Expense)

46. Working Capital
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
current assets - current liabilities
current assets / current liabilities
taxable interest - non-qual. divs - short-term cap. gains