©NINJANERD 2024/2025. YEAR PUBLISHED 2024.
CPF Practice Exam Questions and
Answers 100% Solved
S Corp : a sole proprietorship does not kimit your client's liability, and is
therfore not appropriate. A limited partnership may be suitable, but there is
no mention of a genreal partner. A C Corp would not provide flow-through
taxation as your client requested. The best answer is S Corp - ✔✔Your
client is starting a new business and his highest priority is limiting his
personal lilability. In addition, he would like to have to follow thoruhg
taxation, and the ability to sell internests in his business easily in the future.
Which of the collowing entities is most appropriate to meet your clients
goals?
The nondeductible excise tax for over-contributing to an IRA is 6%, not
10%. An emplyee who makes voluntary contributions to a retirement plan is
considered an active participant. However, an employee participating in a
457 plan is not an active participant. Reguarding alimony payments, they
remain taxable to the recipient if the divorse was executed before
December 31, 2028, and the divorse decree has not been modified based
,©NINJANERD 2024/2025. YEAR PUBLISHED 2024.
on the Tax Cuts and Job Acts of 2017. - ✔✔Which of the following is
correct regarding IRA contributions?
During the third step of the financial planning process, the financial planner
will identify the client's financial strengths and weaknesses, and consider
available options for the achievement of goals. (this answer is subject to
change, when the CPF board adopts its new code of ethics and standards
of conducts) - ✔✔Which of the following are included as part of the third
step of the financial planning process?
Itemized dedications are personal expenses, such as home mortgage
interest and medical expenses that are permitted as a deduction from the
AGI in arriving at taxable income. They are below-the-line deductions. -
✔✔Your client asks you to explain how itemized deductions will impact her
taxes. You tell her that itemized deductions are:
R^2 is the Coefficient of Determination and a measure of systematic risk. If
R^2 is high (>0.60), then beta is the relevant measure to use when
comparing securities. The bete measures are Jensen's alpha and Treynor.
If R^2 is low(<0.60), then standard deviation is the relevant measure to use
when comparing securities. The standard devaition measure is Sharpe. -
✔✔Tyler received a tip from his friend about a new mutual fund he should
, ©NINJANERD 2024/2025. YEAR PUBLISHED 2024.
consider adding to his portfolio. He wanted to determine if the find was
appropriate, so he searched the Internet and found the following data:
standard deviation is high, r^2 is 0.30, alpha is high, and the beta is 0,70.
What should you tell Tyler about the data he collected?
By using a beneficiary or joint tenancy, assets will pass by contract and
avoid probate. Even though the assets will not be included in her probate
estate, they will still be included in her gross estate. Life insurance payable
to a decedent's estate is subject to probate. - ✔✔Your client is concerned
about maintaining her privacy and wants to avoid probate at death. Which
of her assets would be subject to probate?
In a conditionally renewable policy, the insurer has the right not to renew
the policy for specific reasons listed in the contract. - ✔✔The insurer has
the right not to renew the policy for specific reasons listed in the contract.
A noncanceable policy gives the insured the right to renew for a stated
number of years, with a guaranteed premium at renewal. - ✔✔The
premium schedule will never change unless the insured buys more
coverage in the future.
A guaranteed renewable policy gives the insured the right to renew for a
stated number of years, with a guaranteed premium at renewal. - ✔✔The
CPF Practice Exam Questions and
Answers 100% Solved
S Corp : a sole proprietorship does not kimit your client's liability, and is
therfore not appropriate. A limited partnership may be suitable, but there is
no mention of a genreal partner. A C Corp would not provide flow-through
taxation as your client requested. The best answer is S Corp - ✔✔Your
client is starting a new business and his highest priority is limiting his
personal lilability. In addition, he would like to have to follow thoruhg
taxation, and the ability to sell internests in his business easily in the future.
Which of the collowing entities is most appropriate to meet your clients
goals?
The nondeductible excise tax for over-contributing to an IRA is 6%, not
10%. An emplyee who makes voluntary contributions to a retirement plan is
considered an active participant. However, an employee participating in a
457 plan is not an active participant. Reguarding alimony payments, they
remain taxable to the recipient if the divorse was executed before
December 31, 2028, and the divorse decree has not been modified based
,©NINJANERD 2024/2025. YEAR PUBLISHED 2024.
on the Tax Cuts and Job Acts of 2017. - ✔✔Which of the following is
correct regarding IRA contributions?
During the third step of the financial planning process, the financial planner
will identify the client's financial strengths and weaknesses, and consider
available options for the achievement of goals. (this answer is subject to
change, when the CPF board adopts its new code of ethics and standards
of conducts) - ✔✔Which of the following are included as part of the third
step of the financial planning process?
Itemized dedications are personal expenses, such as home mortgage
interest and medical expenses that are permitted as a deduction from the
AGI in arriving at taxable income. They are below-the-line deductions. -
✔✔Your client asks you to explain how itemized deductions will impact her
taxes. You tell her that itemized deductions are:
R^2 is the Coefficient of Determination and a measure of systematic risk. If
R^2 is high (>0.60), then beta is the relevant measure to use when
comparing securities. The bete measures are Jensen's alpha and Treynor.
If R^2 is low(<0.60), then standard deviation is the relevant measure to use
when comparing securities. The standard devaition measure is Sharpe. -
✔✔Tyler received a tip from his friend about a new mutual fund he should
, ©NINJANERD 2024/2025. YEAR PUBLISHED 2024.
consider adding to his portfolio. He wanted to determine if the find was
appropriate, so he searched the Internet and found the following data:
standard deviation is high, r^2 is 0.30, alpha is high, and the beta is 0,70.
What should you tell Tyler about the data he collected?
By using a beneficiary or joint tenancy, assets will pass by contract and
avoid probate. Even though the assets will not be included in her probate
estate, they will still be included in her gross estate. Life insurance payable
to a decedent's estate is subject to probate. - ✔✔Your client is concerned
about maintaining her privacy and wants to avoid probate at death. Which
of her assets would be subject to probate?
In a conditionally renewable policy, the insurer has the right not to renew
the policy for specific reasons listed in the contract. - ✔✔The insurer has
the right not to renew the policy for specific reasons listed in the contract.
A noncanceable policy gives the insured the right to renew for a stated
number of years, with a guaranteed premium at renewal. - ✔✔The
premium schedule will never change unless the insured buys more
coverage in the future.
A guaranteed renewable policy gives the insured the right to renew for a
stated number of years, with a guaranteed premium at renewal. - ✔✔The
