CFP Exam Questions with Correct Answers

CFP Exam Questions with Correct Answers Lisa purchased 500 shares of XYZ stock trading at $40 per share, with an initial margin requirement of 60% and a maintenance margin of 30%. At What price would Lisa receive a margin call? A. $20 B. $22.86 C. $57.14 D. $80.00 - Answer-B. $22.86 40*(1-.60)/ 1-.30= 22.86 Lareen purchased 1000 shares of CWC stock for $80 per share with an initial margin requirement of 65% and a maintenance margin of 40%. Assume the stock price falls to $30 per share, how much equity must Laureen contribute? A. $2/share EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024. Page 2/19 B. $8/share C. $10/share D. $12/share - Answer-C. $10 per a share Required Equity Actual Equity Price: 30 Price: 30 Main. Margin *.40 Debt: (28) Required Equity 12 Actual: $2 Debt = $80* (1-.65) = $28 Required - Actual = contribution amount 12-2=10 MSFT declared a dividend payable to shareholders on the record date of Wed. May 15th. Which is the last possible date an investor could purchase the stock and still receive the dividend? A. purchased on May 13th EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024. Page 3/19 B. purchased on May 12th C. purchased on May 11th D. purchased on May 10th - Answer-D. May 10th. Ex dividend date would be Monday the 13th, and in order to receive the dividend the investor would have to purchase prior to the ex-dividend date. Since the 13th is a Monday the last possible date an investor could purchase the stock and still receive the dividend would be Friday the 10th. If June 4 is the date of record, when must Joe purchase the stock in order to receive the dividend? A. June 1 B. June 2 C. June 3 D. June 4 E. May 31 - Answer-A. June 1st EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024. Page 4/19 Date of record minus 3 days. When purchasing a stock you have to buy before the ex dividend date to receive the dividend. You are interviewing James Smith, CFP to manage your investments and provide financial guidance in other areas of your life. James states that his investment philosophy is as a contrarian; he buys securities that are losing favor and sells securities that are gaining favor. You review his previous track record, which is about equal with the market. His investments are typically in a security that has lost at least 10% for its most recent high. What type of bias is James exhibiting? A. Anchoring B. Herding C. Overconfidence D. Believe Perserverance - Answer-A. Anchorin