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CRPC EXAM 2024
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Exam of 83 pages for the course CRPC at CRPC (CRPC EXAM 2024)
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CRPC EXAM 2024-2025 ACTUAL EXAM180 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |
ALREADY GRADED A+
Mary jGoodwin's jfinancial jsituation jis jas jfollows:
Cash/cash jequivalents$15,000 j
Short-term jdebts$8,000 j
Long-term jdebts$133,000
Tax jexpense j$7,000
Auto jnote jpayments j$4,000 j
Invested jassets j$60,000
Use jassets j$188,000
What jis jher jnet jworth? j- j✔✔Assets j= j$263,000; jliabilities j= j$141,000, jso jnet jworth jis
j$122,000. jTaxes jand jauto jnote jpayments jappear jon jthe jcash jflow jstatement. j1-3
Salaries$70,000 j
Auto jpayments$5,000
Insurance jpayments$3,800
Food$8,000
Credit jcard jbalance$10,000
Dividends$1,100
Utilities$3,500
Mortgage jpayments$14,000
Taxes$13,000
Clothing$9,000
Interest jincome$2,100
Checking jaccount$4,000
Vacations$8,400
Donations$5,800
What jis jthe jcash jflow jsurplus jor j(deficit) jfor jBill? j- j✔✔Income j= j$70,000 j+ j$1,100 j+
j$2,100 j= j$73,200. jExpenses j= j$5,000 j+ j$3,800 j+ j$8,000 j+ j$3,500 j+ j$14,000 j+
j$13,000 j+ j$9,000 j+ j$8,400 j+ j$5,800 j= j$70,500, jso jthere jis ja jsurplus jof j$2,700. jThe
jchecking jaccount jand jcredit jcard jbalances jwould jbe jon jthe jstatement jof jfinancial
jposition.
LO j1-3
,correct jstatements jabout jincome jreplacement jpercentages j- j✔✔Income jreplacement
jpercentages jare jtypically jmuch jhigher jfor jthose jwith jlower jpreretirement jincomes.
Income jreplacement jpercentages jvary jbetween jlow-income jand jhigh-income jretirees.
Income jreplacement jratios jshould jnot jbe jused jas jthe jonly jbasis jfor jplanning.
Income jreplacement jratios jare juseful jfor jyounger jclients jas ja jguide jto jtheir jlong-range
jplanning jand jinvesting. j
The jinverse jof jOption jI jis jtrue. jThose jwith ja jlower jpreretirement jincome jtypically jneed
ja jmuch jhigher jincome jreplacement jpercentage jin jretirement.
LO j1-4
If jTom jand jJenny jwant jto jsave ja jfixed jamount jannually jto jaccumulate j$2 jmillion jby
jtheir jretirement jdate jin j25 jyears j(rather jthan jan jamount jthat jgrows jwith jinflation jeach
jyear), jwhat jlevel jannual jend-of-year jsavings jamount jwill jthey jneed jto jdeposit jeach
jyear, jassuming jtheir jsavings jearn j7% jannually? j- j✔✔Set jyour jcalculator jto jthe j"End"
jmode jand j"1 jP/Yr." jInputs: jFV j= j2000000, jI/YR j= j7, jN j= j25, jPV j= j0, jthen jPMT j=
j$31,621 j
1-4
Bill jand jLisa jHahn jhave jdetermined jthat jthey jwill jneed ja jmonthly jincome jof j$6,000
jduring jretirement. jThey jexpect jto jreceive jSocial jSecurity jretirement jbenefits
jamounting jto j$3,500 jper jmonth jat jthe jbeginning jof jeach jmonth. jOver jthe j12
jremaining jyears jof jtheir jpreretirement jperiod, jthey jexpect jto jgenerate jan javerage
jannual jafter-tax jinvestment jreturn jof j8%; jduring jtheir j25-year jretirement jperiod, jthey
jwant jto jassume ja j6% jannual jafter-tax jinvestment jreturn jcompounded jmonthly. jThey
jwant jto jstart jtheir jmonthly jretirement jwithdrawals jon jthe jfirst jday jthey jretire.
What jis jthe jlump jsum jneeded jat jthe jbeginning jof jretirement jto jfund jthis jincome
jstream? j- j✔✔The jmonthly jretirement jincome jneed jis jnot jspecified jas j"today's
jdollars," jand jno jinflation jrate jspecified; jtherefore, jit jmust jbe jassumed jthat jthe j$2,500
jnet jmonthly jincome jneed jrepresents jretirement jdollars, jand jthe jretirement jperiod
jincome jstream jis jlevel. jTo jcalculate jthe jlump jsum jneeded jat jthe jbeginning jof
jretirement, jdiscount jthe jstream jof jmonthly jincome jpayments jat jthe jinvestment jreturn
jrate:
10BII+ jPVAD jcalculation:
Set jcalculator jon jBEG jand j12 jperiods jper jyear, jthen jinput jthe jfollowing:
2,500 j[PMT]
25 j[SHIFT] j[N]
6 j[I/YR]
0 j[FV]
Solve jfor jPV j= j$389,957
,LO j1-4
Chris jand jEve jBronson jhave janalyzed jtheir jcurrent jliving jexpenses jand jestimated
jtheir jretirement jincome jneed, jnet jof jexpected jSocial jSecurity jbenefits, jto jbe j$90,000
jin jtoday's jdollars. jThey jare jconfident jthat jthey jcan jearn ja j7% jafter-tax jreturn jon jtheir
jinvestments, jand jthey jexpect jinflation jto javerage j4% jover jthe jlong jterm.
Determine jthe jlump jsum jamount jthe jBronsons jwill jneed jat jthe jbeginning jof jretirement
jto jfund jtheir jretirement jincome jneeds, jusing jthe jworksheet jbelow.
(1) jAdjust jincome jdeficit jfor jinflation jover jthe jpreretirement jperiod:$ j90,000present
jvalue jof jretirement jincome jdeficit25number jof jperiods juntil jretirement4%% jinflation
jrateFuture jvalue jof jincome jdeficit jin jfirst jretirement jyear$239,925
(2) jDetermine jretirement jfund jneeded jto jmeet jincome jdeficit:$239,925payment j(future
jvalue jof jincome jdeficit jin jfirst jretirement jyear)30number jof jperiods jin jretirement
The jlump jsum jneeded jat jthe jbeginning jof jthe j- j✔✔This jPVAD jcalculation jrequires
jthat jthe jcalculator jbe jset jfor jbeginning-of-period jpayments. jFirst, jthe jannual
jretirement jincome jdeficit jis jexpressed jin jretirement-year-one jdollars, jresulting jin ja
j$239,925 jincome jdeficit jin jthe jfirst jretirement jyear. jThis jincome jdeficit jgrows jwith
jinflation jover jthe j30-year jretirement jperiod, jand jthe jretirement jfund jearns ja j7%
jreturn. j
The jcalculator jinputs jare j
$239,925, j[PMT]; j
30, j[N]; j
2.8846, j[I/YR]. j(1.07/1.04)-1 jx100 j
Solve jfor j[PV], j
to jdetermine jthe jretirement jfund jthat jwill jgenerate jthis jincome jstream. jIf jyou jenter
j2.8846 jdirectly jinto jthe jcalculator, jyou jwill jget j$4,911,265. jIf jyou juse jthe jequation jto
jcompute jI/YR, jand jthen jhit jthe jI/YR jbutton jyou jwill jget j$4,911,256. jEither jway jthe
janswer jis jclear. jThe jdifference jis jthat jwhen jyou jcalculate jthe jI/YR, jthe jcalculator
jtakes jthe jinterest jrate jout jto jnine jdecimal jplaces. jIf jyou jenter jin jthe j2.8846, jthen jthe
jcalculator jonly jtakes jthe jinterest jrate jto jfour jdecimal jplaces.
LO j1-4
Assume ja jclient jand jinvestment jprofessional jhave jworked jtogether jfor jseveral jyears.
jRecently, jthe jclient's jpersonal jand jfinancial jcircumstances jhave jchanged. jAccording
jto jthe jcourse jmaterials, jwhat jis jthe jnext jasset jmanagement jstep jthat jthe jinvestment
jprofessional jshould jtake? j
A)
gather jdata
B)
analyze jinformation
C)
, make jand jimplement jrecommendations
D)
monitor jperformance j- j✔✔When jthe jclient's jcircumstances jchange, jthe jasset
jmanagement jprocess jgoes jback jto jthe jdata jgathering jstep jin jthe jprocess. jA
LO j1-2
Which jone jof jthe jfollowing jis jnot ja jkey jattribute jof jan jinvestment jpolicy?
A)
clearly jdefined
B)
fluid
C)
realistic
D)
long-term jperspective j- j✔✔An jinvestment jpolicy jprovides jguidelines jthat jare
jstandards jto jbe jfollowed. jIf jthey jare jfluid, jthey jare jever-changing jand jtherefore jwould
jbe jdifficult jto jimplement jand jwould jprovide jinconsistency jin jthe jmanagement jof jthe
jportfolio.
LO j2-1 j
Fluid
All jof jthese jare jexamples jof jasset jallocation jstrategies jexcept
A)
alpha.
B)
tactical.
C)
core/satellite.
D)
strategic. j- j✔✔Alpha jis jnot jan jasset jallocation jstrategy, jbut ja jway jto jmeasure ja
jportfolio jmanager's jreturn jrelative jto jthe jamount jof jrisk jthat jhas jbeen jtaken. jalpha j
LO j2-5
Assume jthe jfollowing jasset jclasses jhave jthe jcorrelations jto jlong-term jgovernment
jbonds jshown jbelow:
Treasury jbills:.12
Gold:-.25
Large jstocks:.22
Small jstocks:.17
Which jone jof jthe jfollowing jbest jexemplifies jthe jimpact jof jdiversification jon jlong-term
jgovernment jbonds? j- j✔✔The jasset jwith jthe jlowest jcorrelation jprovides jthe jmost
jdiversification. jTherefore, jgold jprovides jmore jdiversification jthan jany jof jthe jother
jassets. jSmall jstocks jdo jprovide jmore jdiversification jthan jTreasury jbills, jbut j
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