Free CFP® Online Questions — General Principles of Financial Planning
CFP practice questions serve as a valuable self-assessment tool to measure the progress of your Certified Financial Planner Exam. By practicing the CFP questions, you can gauge your current performance and find out where you are lagging. Analyzing the weak areas and keeping track of your previous attempts can help you understand the areas you excel and lack in.
CFP Exam Prep by Achieve offers you free ten important CFP practice questions from the subject - General Principles of Financial Planning. You can solve these sample CFP Certification Examination Questions to find out how good your understanding is of this subject.
Q 1. A grandma wishes to fund her grandson’s first year of college 10 years from now. If the first year costs $40,000, what rate must she earn on her $16,000 investment to be able to afford it?
A. 9.59%
B. 7.00%
C. 8.27%
D. 9.60%
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Q 2. Which would be a realistic investment plan for a baby, given that educational expenditures have risen at a pace considerably over inflation for decades?
A. Invest in corporate bonds with short durations
B. Invest in short-term government securities
C. Invest in a broad equity fund
D. Invest in cash equivalents like CDs
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Q 3. Uncle John would want to contribute to his nephew’s education expenses this year. As the CEO of a tech company, John makes more than $6 million every year. John’s most effective means of assistance would be:
A. Contribute to a Roth IRA and use the basis to aid his nephew
B. Directly pay the college tuition costs not covered by aid
C. Fund a Coverdell Educational Savings Account
D. Buy Savings Bonds
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Q 4. The maximum number of semesters a student may receive Pell Grants for is:
A. 9
B. 10
C. 12
D. 15
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Q 5. What factors could influence your decision to open a Coverdell Education Savings Account (ESA) rather than a 529 Plan?
A. No income cap
B. Self-direction of investments
C. Higher contribution limits
D. Potential for superannuation
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Q 6. Which is not considered a qualified educational expense?
A. Tuition
B. Off-campus meals
C. Mandatory fees
D. Textbooks for classes
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Q 7. Tuition, accommodation and board, obligatory fees, and necessary books total $80,000 per year at the best technical institution in your state this year. What is the cost of your client’s child’s freshman year in 6 years, assuming it costs 6.5 percent higher every year?
A. $100,507.17
B. $100,366.92
C. $119,724.69
D. $116,731.38
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Q8. Which of the following forms of aid carries no annual maximum?
A. FSEOG
B. Pell Grants
C. Direct Subsidized Loans
D. Federal Work-Study
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Q9. Assume Erik wants to assist his children in paying for college starting in eight years, but he wants to be able to do so in a variety of ways in the future due to his retirement demands. Which choice is the greatest for him to use?
A. Fund 529 Plans for each child
B. Fund a Roth IRA
C. Fund Coverdell ESAs for each child
D. Start a GoFundMe page
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Q10. How does a college’s financial aid office compute the amount of need-based help a student receives, roughly?
A. EBITDA + COGS
B. COA + EFC
C. COA — EFC
D. AGI — COA
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The best way to prepare for the CFP exam is to keep track of your scores and daily progress. Our Certified Financial Planner Exam Prep app tracks your performance when you are solving the CFP questions. It reveals your weaknesses and tells how much effort you must make to overcome them. Practice questions from the CFP Exam Prep by Achieve to track your preparation and practice questions in the areas where you need improvement. Subscribe to the CFP Exam Prep by Achieve to maximize your score.
Originally published at https://cfp.achieve.ai on July 20, 2021.