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CFP Mock Exam 2024 (Updated) Questions With Complete Answers Graded A+
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CFP Mock Exam 2024 (Updated) Questions With Complete Answers Graded A+
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Name: Score:109 Multiple choice questions
Term 1 of 109
In order to maintain a SIMPLE plan, an employer may not have more than __________ employees.
25
50
75
100
Term 2 of 109
When property is transferred for less than full consideration of money or money's worth, the value
of the gift is equal to which of the following?
The value of the property transferred less the consideration received
The value of the property transferred plus the consideration received
The value of the consideration received
The lesser of the value of the property or the consideration received
Term 3 of 109
When a bond is selling at a premium to par, the YTM will always be __________ the bond's coupon
rate. If a bond is selling at a discount to par, the YTM will always be __________ the bond's coupon
rate.
greater than, less than
less than, greater than
greater than, equal to
less than, equal to
,Term 4 of 109
An employee will not be taxed on compensation if which of the following conditions are
satisfied?
The employee elects to defer compensation under a written agreement before services are
rendered.
The agreement between the employer and employee represents an unsecured promise to
pay benefits.
The plan that will pay benefits to the employee is unfunded, or if funded, is subject to
substantial risk of forfeiture.
All of the above are correct.
Term 5 of 109
All but which of the following are characteristics of an employee stock purchase plan (ESPP)?
The maximum discount permitted is 15% of the greater of the market price on the date the
option is granted or the date the shares were purchased.
The plan must be offered to employees on a nondiscriminatory basis.
The maximum fair market value of stock an employee has the right to purchase cannot
exceed $50,000 in any calendar year.
An ESPP allows a company to sell stock to employees at a discount from the market price.
,Term 6 of 109
5. Which of the following are correct regarding a bond's yield to maturity (YTM)?
(1) The YTM assumes that coupon payments are reinvested at the YTM rate of return for the life of
the bond.
(2) When the market rate of interest for the same term and risk is higher than the coupon rate, a
discount will be priced into the bond.
(3) Bonds that are riskier will have lower yields to maturity.
(4) The YTM is the internal rate of return for cash flow associated with a bond, including the
purchase price, coupon payments, and maturity value.
(1) and (2) only
(3) and (4) only
(1), (2), and (4) only
(1), (3), and (4) only
Term 7 of 109
Which of the following is correct regarding non-systematic risk?
It includes such risks as tax risk and financial risk.
An investor who owns five growth common stocks can reduce non-systematic risk by
adding value common stocks to her portfolio.
It is the risk associated with a particular security or company.
All of the above are correct.
Term 8 of 109
Buying a __________ and selling a __________ are both bullish strategies.
put, call
put, put
call, call
call, put
, Term 9 of 109
Annual sales divided by average inventory level
B. ERISA
[All qualified retirement plans must satisfy the reporting and disclosure requirements as
specified by ERISA.]
Inventory turnover ratio
[Inventory turnover ratio = annual sales divided by average inventory level]
A. low coupon
[A large interest rate change has the most significant effect on a low coupon bond.]
A. cash
[The majority of individual tax returns filed in the US use the cash method of accounting.]
Term 10 of 109
According to the anomaly known as the small-firm effect, __________ companies have been shown to
outperform __________ companies on a risk-adjusted basis over a period of many years.
large cap, small cap
mid cap, small cap
small cap, large cap
small cap, mid cap
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