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. Sustainable Growth Rate
[(1+ NR) / (1 + CCL)] - 1
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits
g = ROE X b - where b is equal to the retention ratio

2. Arithmetic Mean Return; T = Terminal period; good for comparing different investments
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
(1/T)(r1+r2+...+rT)
Sources of Funds-Use of Funds or Money in- Money out
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization

3. After-tax Yield
current assets / current liabilities
Net Income/Equity
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization
Tax Free Yield/(1 - Tax Bracket)

4. Net Investment Income
Tax Credit/marginal tax rate
Total Long-term Debt / Equity
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n

5. Book Value (of company stock)
assets less liabilities - divided by the number of shares of common stock of a company
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income
Sales / Average Total Assets
Total Liabilities / Equity

6. financial life cycle
Price Earnings Growth ratio; P/E divided by projected earnings growth
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)
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits
current assets / current liabilities

7. Opportunities in Financial Planning
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
(cash + marketable securities) / current liabilities
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
Net Worth/Total Assets

8. PEG ratio
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income
Price Earnings Growth ratio; P/E divided by projected earnings growth
EAT / Sales
(current assets - inventory) / current liabilities

9. Working Capital
current assets - current liabilities
[(1+ NR) / (1 + CCL)] - 1
(P1 + D - P0)/P0
current assets / current liabilities

10. Net Cash Flow
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)
(1/T)(r1+r2+...+rT)
P*(1+g)/(k-g) P=div per share divided by other div
Sources of Funds-Use of Funds or Money in- Money out

11. Assets to Equity ratio
Net Income/Equity
Total Assets / Equity
current assets - current liabilities
Sources of Funds-Use of Funds or Money in- Money out

12. CFP Ethical principles
EBIT/I (Where I = Interest Expense)
Price Earnings Growth ratio; P/E divided by projected earnings growth
Explanatory - Interpretive - Reassuring - Suggestive
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence

13. Times Interest Earned
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
EBIT/I (Where I = Interest Expense)
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
Sales / Average Total Assets

14. Quick Ratio (aka Acid test)
Sources of Funds-Use of Funds or Money in- Money out
P*(1+g)/(k-g) P=div per share divided by other div
current assets - current liabilities
(current assets - inventory) / current liabilities

15. Solvency Ratio
(P1 + D - P0)/P0
Tax Deduction * marginal tax rate
taxable interest - non-qual. divs - short-term cap. gains
Net Worth/Total Assets

16. Gross Investment income
taxable interest - non-qual. divs - short-term cap. gains
dividends / earnings
Total Assets / Equity
Earnings Before Interest & Taxes

17. 'normal' ratio
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
P*(1+g)/(k-g) P=div per share divided by other div
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

18. Social Styles
driving - expressive - amiable - analytical
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
Net Income/Equity
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)

19. Debt to Equity ratio
Tax Deduction * marginal tax rate
Sales / Average Total Assets
driving - expressive - amiable - analytical
Total Long-term Debt / Equity

20. After-tax Return
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
Total Return (1 - tax bracket)
dividends / earnings
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits

21. Real Return (inflation adjusted); NR = Nominal Return; CCL = Change in Cost of Living (inflation rate)
Sales / Average Total Assets
Earnings After Taxes
[(1+ NR) / (1 + CCL)] - 1
Explanatory - Interpretive - Reassuring - Suggestive

22. aka Net Income
Net Worth/Total Assets
current assets - current liabilities
Earnings After Taxes
Explanatory - Interpretive - Reassuring - Suggestive

23. Domains of a CFP
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
Price/Earnings per share

24. Asset Turnover Ratio
Sales / Average Total Assets
Sources of Funds-Use of Funds or Money in- Money out
EAT / Sales
(P1 + D - P0)/P0

25. Savings Ratio
1 - the payout ratio
g = ROE X b - where b is equal to the retention ratio
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income

26. Holding Period Return
(P1 + D - P0)/P0
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
dividends / earnings
Total Return (1 - tax bracket)

27. Major CFP Planning Areas
Net Worth/Total Assets
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits
Tax Credit/marginal tax rate
P*(1+g)/(k-g) P=div per share divided by other div

28. Equivalent Tax Deduction
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence
Tax Credit/marginal tax rate
EBIT/I (Where I = Interest Expense)
Net Income/Equity

29. The retention ratio
1 - the payout ratio
P*(1+g)/(k-g) P=div per share divided by other div
(Mortgage+Debt Repayment)/Net Income
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence

30. Attributes of Effective Advisor communiations
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness
(cash + marketable securities) / current liabilities
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)

31. Net After Tax Profit Margin
EAT / Sales
Total Return (1 - tax bracket)
Explanatory - Interpretive - Reassuring - Suggestive
EBIT/I (Where I = Interest Expense)

32. Current Ratio
Net Worth/Total Assets
current assets / current liabilities
Tax Deduction * marginal tax rate
(P1 + D - P0)/P0

33. EBIT
g = ROE X b - where b is equal to the retention ratio
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
Total Long-term Debt / Equity
Earnings Before Interest & Taxes

34. Types of Understanding Responses Associated With Active Listening
EGAD CIMP - Establish and define Relationship - Gather Information - Analyze and Evaluate Current Stauts - Develop Recommendations - Communicate Recommendations - Monitor Recommendations - Practice Professional Standards
Continuing - Restatement of content - Reflection of feeling - Clarifying - Summarization
P*(1+g)/(k-g) P=div per share divided by other div
Total Return (1 - tax bracket)

35. P/E ratio
1 - the payout ratio
Price/Earnings per share
Price Earnings Growth ratio; P/E divided by projected earnings growth
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)

36. Equivalent Tax Credit
Tax Deduction * marginal tax rate
Explanatory - Interpretive - Reassuring - Suggestive
Total Assets / Equity
dividends / earnings

37. Cash Ratio
(P1 + D - P0)/P0
(Mortgage+Debt Repayment)/Net Income
Total Assets / Equity
(cash + marketable securities) / current liabilities

38. Debt Service Ratio
taxable interest - non-qual. divs - short-term cap. gains
(Mortgage+Debt Repayment)/Net Income
IOC FC PD - Integrity - Objectivity - Compentence - Fairness - Confidentiality - Professionalism - Diligence
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)

39. Liquidity Ratio
Sales / Average Total Assets
Dollars of coupon interest per year/Bond's current market price
(Liquid Assets/Total Current Debts=Liquid Assets/(Current Liabilities+Annual Loan Payments)
Tax Free Yield/(1 - Tax Bracket)

40. Present value of a Bond
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
(cash + marketable securities) / current liabilities
(Coupon1 /2)/(1+YTM)/2?1 + (Coupon2 /2)/(1+YTM)/2?2 +...+ (CouponT /2)/(1+YTM)/2?n
Unconditional positive regard - Accurate empathy - Genuineness - Self-awareness

41. financial planning pyramid
(P1 + D - P0)/P0
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
Tax Credit/marginal tax rate
G RETIRE - General Principles - Retirement Planning - Estate Planning - Tax Planning - Investment Planning - Risk Management (Insurance) - Employee Benefits

42. Types of Leading Responses
Tax Deduction * marginal tax rate
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
Total Long-term Debt / Equity
Explanatory - Interpretive - Reassuring - Suggestive

43. ROE (Return On Equity)
(current assets - inventory) / current liabilities
Net Income/Equity
Gross investment Income less any deductible other investment-related expenses (must exceed 2% of AGI)
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

44. The payout ratio
dividends / earnings
Total Long-term Debt / Equity
Top: Retirement and Estate - Mid: Growing Investments - Bottom: Guarding Against Uncertainty (Insurance)
Earnings After Taxes

45. Current Yield of a bond
Total Liabilities / Equity
assets less liabilities - divided by the number of shares of common stock of a company
current assets / current liabilities
Dollars of coupon interest per year/Bond's current market price

46. Total Debt to Equity ratio
Sales / Average Total Assets
Net Cash Flow+Already Being Saved or Invested/Annual After Tax Income
Total Liabilities / Equity
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

Test your basic knowledge |

CFP: Certified Financial Planner

Communication skills, Self help skills, Self improvement skills, Productivity skills, Writing skills, Business skills, Thinking skills & More...

502 Pages | Only $12 | PDF / EPub, Kindle Ready

Link to This Test

Related Subjects