What is the deadline for a CFP® professional to notify the CFP Board of a reportable matter?
30 days.
When a CFP® professional’s right to use the CFP marks is suspended, what must they do?
Immediately stop using the CFP marks and stop representing themselves as a CFP professional.
If a CFP® professional ignores a suspension and continues to use the CFP marks, what disciplinary action can occur?
Revocation of the right to use the CFP marks.
If CFP certification is revoked, can the individual appeal to restore the marks?
No. Revocation is permanent.
When can a CFP® professional share confidential client information with a third party?
Only with explicit client permission or when legally required.
Why does forgery or fraud by a CFP® professional violate CFP ethical standards?
It violates the fitness standards required of the profession and demonstrates a lack of integrity.
How much emergency fund should a household typically maintain?
Three to six months of living expenses.
How does a large trust income affect emergency fund needs?
The emergency fund may be reduced because the income is stable and ongoing.
When is interest on a home equity loan tax deductible?
When the loan proceeds are used to buy, build, or substantially improve the home securing the loan.
What financial concept is used to determine the annual savings needed for future college costs?
Future value of an annuity adjusted for inflation and investment return.
How does having twins affect college funding calculations?
The cost doubles while the timing and return assumptions remain the same.
Who controls monetary policy in the United States?
The Federal Reserve System.
What are the three primary tools used by the Federal Reserve to control the money supply?
Open market operations, the discount rate, and reserve requirements.
Which debts generally cannot be discharged in bankruptcy?
Child support, alimony, and certain taxes.
What is the first step in the financial planning process?
Establish and define the client–planner relationship.
What concept is used to calculate the future value of repeated annual investments?
Future value of an ordinary annuity.
If the NPV of an investment equals zero at a given discount rate, what does that indicate about the IRR?
The IRR equals the discount rate used in the NPV calculation.
When calculating life insurance needs using a financial calculator, which mode is typically used?
End mode.
