Sample CFP Exam Review Questions for Investment Planning
Practicing CFP exam review questions can help you increase your confidence in attempting the question paper on the final D-Day. CFP exam question paper has a fixed question pattern; therefore, by practicing these questions, you can become familiar with the types of questions asked to boost your confidence. This exercise would help you prepare for the real exam because when you gain a sense of familiarity with the type, you can solve the CFP questions more quickly and confidently.
CFP Exam Prep App by Achieve offers you ten free sample practice questions for the Certified Financial Planner Exam. Solve these questions to know what types of questions are asked in the CFP exam.
Q1. What kind of discounts are minority interest, lack of marketability, and blockage?
A. ROC (return on capital)
B. ROI (return on investment)
C. Valuation
D. Comparable
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Q2. What factors go into determining the fair market value of a publicly traded stock?
A. By taking the average of the highest and lowest selling prices listed on the applicable valuation date.
B. On the appropriate valuation date, the difference between the highest and lowest reported selling prices
C. By the median of the quoted selling prices on the applicable valuation date
D. By the mode of the selling prices on the applicable valuation date
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Q3. Ricky recently purchased a $60,000 autographed picture by a well-known artist. Over the next five years, he believes it will rise in value by 7% compounded yearly. How much will Ricky’s painting be valued at the end of the fifth year if he is correct?
A. $84,153.10
B. $72,093.42
C. $87,562.23
D. $97,891.18
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Q4. Cindy was the proud owner of a $80.00 rare book. Before selling the book, she kept it for 15 years. For the 15-year period, the internal rate of return was 11%. What was the book’s ultimate selling price?
A. $201.21
B. $382.77
C. $413.52
D. $347.09
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Q5. What should a financial planner do if a client’s risk-profiling questionnaire results are aggressive, and his existing investment portfolio is aggressive as well?
A. Confront the client about his risky financial outlook
B. Adjust the client’s asset allocation
C. Inform the client that no adjustments to his portfolio are required at this time.
D. Ask the client to take the risk-profile questionnaire again
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Q6. What is the internal rate of return on a $6,000 zero-coupon bond with a current market price of $4,700 and a maturity date of six years?
A. 4.16%
B. 5.25%
C. 2.75%
D. 3.25%
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Q7. What is the current market price of a $2,000 zero-coupon bond with a 6.5 percent internal rate and a six-year maturity date?
A. $1,370.67
B. $1,446.01
C. $1,998.76
D. $1,776.65
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Q8. Which model aims to maximize the expected return for a given amount of risk?
A. Modem Portfolio Theory
B. Odd Lot Theory
C. Greater Fool Theory
D. Efficient Market Hypothesis
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Q9. Which of the following is the important metric to employ when comparing securities when R-squared is high?
A. Gamma
B. Delta
C. Alpha
D. Beta
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Q10. Inventory turnover ratio equals:
A. Annual sales + average inventory level
B. Annual sales — average inventory level
C. Annual sales ÷ average inventory level
D. Annual sales × average inventory level
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CFP exam questions can prove quite perplexing to the aspirants if they have not attempted similar MCQs before. For example, if you sit for the Certified Financial Planner exam and have only learned theory, have not used it practically, and have no idea about the question pattern, then you might find yourself in a challenging situation. You can subscribe to the CFP Exam Prep by Achieve to practice 1900+ Questions, covering each subject.
Originally published at https://cfp.achieve.ai on March 13, 2022.