CRPC Exam Questions and Answers
New Update
Which one of the following is not a key element of an investment policy? - Answer-
names of specific stocks to be in the portfolio
Which one of the following is a characteristic of Treasury inflation-protected securities
(TIPS)? - Answer-The increase in principal is taxable each year.
Assume your client has the following portfolio:
StockWeightBetaBCD40%1.15EFG25%.90HIJ35%1.05
What is the overall weighted beta for this portfolio? - Answer-1.06
Your client owns a bond fund with a duration of 6.5. If interest rates increase 1.5%, what
is the expected change in price for this fund? - Answer-9.75% decrease
The process of rebalancing is a key factor in - Answer-strategic asset allocation.
What does Jensen's alpha tell you? - Answer-the percentage a manager over- or
underperformed based on the amount of risk taken
Which of the following are not used in technical analysis? - Answer-financial statement
ratios
When performing bond calculations, which of the following general assumptions should
be made unless stated otherwise? - Answer-The coupon rate is annualized but paid
semiannually for U.S. bonds.
Assume your client has a 5% bond, par value of $1,000, and 15 years to maturity.
Comparable bonds are yielding 6%. What is the value of this bond? - Answer-$902
Which of the following is correct regarding the additional payroll tax for high wage
earners that was brought about by the Affordable Care Act? - Answer-The tax was
designed to provide additional funding for Medicare.
Mark, a financial adviser, has a client who has worked in two positions during his
lifetime. The client's first position was a state or local government position that was not
covered by Social Security. The client is receiving a pension from that employment. His
second position was covered by Social Security and he is eligible for Social Security
retirement benefits. Mark should advise his client that - Answer-his eligibility for Social
Security retirement benefits may be reduced due to the windfall elimination provision
(WEP).
,Suzy begins her Social Security retirement benefit at full retirement age (FRA). What is
the amount that she will receive? - Answer-primary insurance amount (PIA)
Henry, a fully insured worker for Social Security purposes, will retire next month at the
age of 62. Henry is concerned that he may lose some of his Social Security benefits
because of the earnings limitation test.
Which of the following sources of Henry's income are counted for purposes of the
earnings limitation test?
IRA withdrawals
self-employment earnings
pension annuity payments
inheritance payments
dividend income - Answer-II only
Assume that a worker's Social Security full retirement age is 66. What percentage of the
worker's full retirement age benefits will be paid to her at age 62? - Answer-75%
What is the maximum percentage of Social Security benefits that may be taxed? -
Answer-85
A worker's primary insurance amount (PIA) is the amount they receive from Social
Security - Answer-if he or she began payments at full retirement age.
For a worker whose full retirement age is 66 or later, the annual delayed retirement
credit percentage for the years you delay receipt of benefits beyond (FRA) is - Answer-8
Delaying receipt of benefits (for example until age 70) will result in all of the following
except - Answer-permanently reduced benefit amount.
Ann has reached her full retirement age (FRA) of 66 in 2020. She can elect to receive
$1,000 now, or delay receipt by two years. She expects to live until age 90. Ignoring
outside factors, when should she begin her benefits? - Answer-two years from now
Michael, a 62-year-old single man, is considering beginning his Social Security benefits
to supplement his income of $14,000 per year. How much will he lose in Social Security
benefits due to the earned income restrictions? - Answer-0
If provisional income exceeds all the thresholds given, then a maximum of
___________ of Social Security benefits are subject to taxation. - Answer-85%
Brent and Carol are married and file jointly. They have an AGI of $50,000 and they
receive a combined Social Security benefit of $15,000. They have no tax-exempt
income. What is the maximum percentage of their Social Security benefit that will be
subject to taxation? - Answer-85
Spousal retirement benefits can be claimed as early as age ______. - Answer-62
,Jeff and Betsy both attained their FRA in time to employ the "restricted application for
spouses" strategy. Jeff's PIA at his FRA was $2,000 and Betsy's was $1,200. If they
employ the "restricted application for spouses" strategy, Betsy will begin receiving
$_____ per month. - Answer-1,200
Carla is collecting $600 per month from a government pension and is also eligible to
receive a Social Security spousal benefit of $1,000 per month. Due to the GPO, her
Social Security spousal benefit will be reduced to ____________. - Answer-600
David began receiving Social Security benefits in June 2020. He later learned that he
should have delayed receipt of his benefits until a later age. He has until _______ to
pay back all payments and refile for increase benefits at a future date. - Answer-June
2021
Jerry was born in 1954. What age does Social Security consider to be his full retirement
age (FRA)? - Answer-66
Mary is 69 years old. She is receiving $1,800 per month in Social Security. Her husband
Ralph, age 67, who has not worked enough quarters outside the home to be covered in
his own right, receives 50% of what Mary receives each month ($900). Assume that
Mary dies tomorrow. What will Ralph's Social Security benefit be? Assume he has
reached his survivor FRA. - Answer-1,800
Bob and Helen just won the lottery. The benefit this year will be $50,000, and it will
increase over the next 19 years. Bob's monthly Social Security benefit is $1,800;
Helen's monthly Social Security benefit is $1,200. Bob is age 68, and Helen is age 69.
Which one of the following is a correct statement about Bob and Helen's old-age Social
Security benefits? - Answer-Up to 85% of their Social Security benefit must be included
in gross income.
Henry and his wife Etta will both reach their FRAs this month, and they both plan to
begin receiving Social Security benefits next month. Etta's primary insurance amount
(PIA) is $1,900; Henry's PIA is $975. What will their maximum Social Security benefit
be? - Answer-They will both receive their respective PIAs.
Which one of the following is a correct statement about old-age Social Security
benefits? - Answer-Old-age Social Security benefits are not reduced for persons who
have attained their Social Security FRA regardless of the amount of earned income
received.
Jill and Mark are celebrating their 20th wedding anniversary, receiving a 20-year watch
from their employer, and reaching FRA all on the same day with a trip to the beach.
Which of the following statements correctly describe the Social Security benefit Jill is
eligible to receive? - Answer-100% of her own benefit
, An individual's Social Security payment amount will be adjusted annually to account for
increases in inflation as measured by the _____________. - Answer-CPI-W
Higher income earners will have an income replacement ratio that is - Answer-lower
than low income earners.
On average, Social Security represents ______ of the income of the elderly. - Answer-
33
Tom, 59, is a widower and is receiving a widower's benefit on his deceased spouse's
record. Tom is considering getting remarried. As a planner, you should suggest which
one of the following? - Answer-He should wait until age 60 to remarry.
Which one of the following counts as "earnings" for the Social Security earnings test? -
Answer-Self-employment net earnings
Carl is going to reach FRA later in the current year. He has begun Social Security
benefits but is still working. His Social Security benefits will - Answer-be reduced $1 for
every $3 earned above the earnings cap.
Social Security payments are - Answer-taxable if your provisional income exceeds the
applicable threshold.
Social Security provides individuals with protection against which of the following risks?
- Answer-All of these
Social Security began as a program to provide retirement income, but has been
expanded to provide all of the following income except - Answer-survivor benefits to
spouse caring for a child under 19.
Gary reached FRA this year (2020) and filed for his Social Security benefits. His wife,
Mary, is 62 and wishes to file for spousal benefits when she turns 63 later in 2020. If
Gary's full benefit is $2,000, what will Mary's benefit be? - Answer-725
Tammy doesn't begin her Social Security benefit at FRA (age 66), instead opting to
delay while collecting delayed retirement credits. When she reaches age 68, however,
she encounters financial difficulty and must file for her benefits. How much will her
payment have increased? - Answer-16
It is January 15, 2020. Bill and Mary both attained age 66 in 2019. They want to employ
the restricted application strategy. Bill is the higher income earner. What can be said
about their options? - Answer-Bill should file a restricted application for spousal benefits
because he is the higher income earner.
Margaret is confused about her options and takes a friend's advice to file and begin
collecting benefits at age 62. Two years later, she attends one of your seminars on
