Passing the CFP Exam is the most challenging step in obtaining your Certified Financial Planner designation. Topics on the test include general principles, insurance planning, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning. Try these free CFP practice questions to help you with your test prep. Good luck with your certification!
CFP Exam Questions
XYZ stock has a Beta of −2. If the market were to go up by 2%, what change in price would you expect from XYZ?
Increase of 2%.
Increase of 8%.
Decrease of 2%.
Decrease of 4%.
These are negotiable certificates issued by U.S. banks and traded on U.S. exchanges. The certificates represent a specific number of shares of a foreign stock.
European Mutual Funds.
International Fixed Annuities.
Foreign Deposit Trusts.
American Depositary Receipts.
Subtracting the risk-free rate of return from the expected return of a stock will give you the:
Which of the following is NOT a qualifying event that allows for continuing health care coverage under COBRA?
The employer goes out of business.
The covered employee dies.
The employee loses eligibility for coverage due to involuntary termination.
A divorce terminates the eligibility for coverage of a spouse.
Jim's mother purchased 3,000 shares of ABC stock 15 years ago for $22,000. When his mother died, Jim inherited the stock. The day she died the stock was worth $35,000. Two years later, Jim sold the stock for $30,000. What are the tax consequences for Jim?
He will have a gain of $30,000.
He will have a loss of $5,000.
He will have a gain of $8,000.
He will not need to show anything about this stock sale on his tax filings.
If Wanda rents out her vacation home, the rental income is not taxable unless the home is rented out for more than ___ days in a year.
Money purchase plans have which of the following characteristics?
They are a type of defined-benefit plan.
The employer can vary their contributions based on profitability.
The employer contributions are not tax deductible.
The employer is required to make a contribution to the plan each year.
This is a retirement savings plan available for employees of educational institutions, ministers, and certain non-profit organizations.
What are the consequences of a wash sale?
Prosecution by the IRS.
Basis adjustment and holding period adjustment.
Sale is cancelled retroactively.
Increased margin requirements.
Under social security, what is the full retirement age for someone born between 1943 and 1954?
Your client makes a $25,000 investment that is earning 9% per year. Using the rule of 72, how many years will it take for the investment to be worth $100,000?
What is the name for a dividend that meets the necessary criteria to be taxed at the long-term capital gains tax rate, rather than at the higher tax rate used for ordinary income?
Which of the following would be NOT be included in the probate estate?
A farm owned as community property.
A car owned by the decedent.
Salary due to the deceased.
A Keogh Plan with a named beneficiary.
Which of these is a bearish strategy?
Buying call options.
Buying put options.
Selling put options.
Which of these is NOT one of the requirements that must be met in order to qualify as an S corporation?
Must be a domestic corporation.
Shareholders must be individuals, estates, certain exempt organizations, or certain trusts.
Must have more than 100 shareholders.
Must have one class of stock.
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The CFP exam is 10 hours long, and all questions are multiple choice format. It is divided into 3 sessions, and each session has a series of CFP exam questions along with a lengthy case study. The first session is always on a Friday, and is 4 hours long. Then there are two session on Saturday that are each 3 hours long.
The CFP test is administered by the Certified Financial Planner Board of Standards. Due to the number of questions and the broad range of topics, your CFP exam prep will require many hours of studying. Practice questions are great for test prep, so be sure to work through as many CFP sample questions as possible.