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CFP Review > Fundamentals > Flashcards

Fundamentals Flashcards

(51 cards)

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0
Q

Chapter 13 Bankruptcy

3

A

A repayment plan is implemented

Debt payments can be reduced to make more manageable

Debtor is not required to relinquish the assets

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1
Q

Practice Standards

6

A

EGPRIM

establish

Gather

Analyze

Present recommend

Implement

Monitor

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2
Q

Breadth of the Market

A

Measures the strength of the market by comparing numbers of advancing versus declining stocks

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3
Q

The insider trading and securities Fraud act 1988

A

Gave the SEC authority to seek civil penalties against those accused of insider trading

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4
Q

Collateral Source Rule

A

Person who commits tort is liable even if recovered from insurance

If you commit tort you can’t benefit

Insurance companies can’t benefit either from act of tort

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5
Q

Codes of Ethics

7

A

FIDOC OC

Fairness

Integrity

Diligence

Objectivity

Competence

Professionalism

Confidentiality

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6
Q

Disclosure in writing

6

A

Commission

Conflicts of interest

Third parties being used

Services provided

Time of agreement start and end dates

How to end agreement

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7
Q

What are the Life Cycles

A

Asset accumulation- ages 21-45

Conservation/protection 45-65

Distributing/gifting- 65 plus

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8
Q

529

A

Contributions are considered a gift
Soft splitting can be applied
5 years forwarding

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9
Q

Coverdell Education Savings

A

2000 per year per beneficiary

Phase of limits
95-110
190-220

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10
Q

Series EE Bibds

A

Interest earned is not taxed if used for qualified education expense up to 30,000
Can be used after age 24

Phase out -
76000-91000

113950-143950

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11
Q

Educational accounts subject to kiddie tax

3

A

UGMA
2503 B
2503 C

Kiddie tax on unearned income greater than 2000 for children less than 19(18) or full time dependent student till 24

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12
Q

PLUS Loans

A

Not financially based Federal Loans for parents or students(credit checked)

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13
Q

Perkins Loans

A

Need based
Administrated by University
Graduate and undergraduate

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14
Q

Subsidized Loans

A

Fiancial needs based

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15
Q

Unsubsidized Stafford Loan

A

Students that need addition loan amounts

Government pays interest during college years. Students take loan over after

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16
Q

Pell Grants

A

Federal grant gifted by government for undergraduate school

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17
Q

Federal Supplement Educational Opportunity(SEOG)

A

Need based program managed by University not the federal government.

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18
Q

American Opportunity Tax Credit

AOTC

A

For at least half time students parents for first four years of post secondary education

100% first 2000
25% next 2000

Total
1500 if over 4K

PER STUDENT NOT OER FAMILY

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19
Q

Lifetime Learning Credit

A

Can claim up to 2000 PER FAMILY

can be claimed UNLIMITED NUMBER Of years

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20
Q

The Dow Thoery

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A

Is used to inform the end of a bull or bear market

21
Q

The Markowitz efficiency Frontier

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A

Measures the highest return given a specific level of risk using Standard deviation

Not Beta

22
Q

Bankruptcy options

3

Study These Flashcards
A

Chapter 7- liquidation

Chapter 11- reorganization

Chapter 13- debt adjustment

23
Q

Premium bonds and their relationship to CR CY and YTM

Study These Flashcards
A

Current yield > Coupon Rate > YTM

24
Discount bond
CR < CY < YTM
25
Bond exception theory is?
Long term interest rates are equal to an average of short term rates over the long term
26
Liquidity Preference theory
Interest rates reflect the sum of current and expected short term rates plus liquidity(risk) premiums
27
Private placement
Raising money privately Eliminates full disclosure and SEC registration Avoids cost of selling to public Can raise capital quickly Higher cost of capital to issuing firm
28
Registered investment advisors three step test 3
Does the adviser provide analysis or advice concerning securities? Is the adviser in the business of providing investment advisory services Does the investment adviser receive compensation for providing investment advisory services
29
Elasticity
Changes in demand
30
Not considered an investment company | 4
Banks or bank holding companies Person who's advice is limited to U.S. government securities Publishers of bona ride newspapers or financial publications for general and regular circulation Lawyers whose performance of advisory services is solely incidental to those practice
31
Information that must be in writing | 8
``` Parties to agreement(who) Duration How terms end Services provided Compensation Conflicts of interest(even certifiable areas of expertise) Outside professionals being used Contact information for certification and their employer ```
32
CFP can borrow money if
Client is an immediate family member Client is an institution in the business of lending
33
Certificants can lend money if
Client is an immediate family member If the certificant works for an institution that is in the business of lending money
34
Notification by Certificant to CFP board
Changes in contact information in 45 days Crimes 10 days... Alcohol or drugs count Suspensions 10 days
35
Forms of discipline by CFP Board enforcing the rules of conduct
Private censure-unpublished written warning mailed to certificant Public letter of Admonition- published written reproach of behavior Suspension- for a specific period of time no longer than 5 years. Published or unpublished Revocation- removed can't be reinstated
36
ADV Form
Is filed initially for an RIA with the SEC
37
Form ADV-W
Is filed when an RIA ceases to operate
38
Schedule I Form ADV
Is filed annually to let SEC know you are still in business
39
Form TDF90-22
Is a tax form for foreign institutions
40
Deflation I often a decline
In money supply
41
Disinflation
Denotes a decline in the inflation rate Or a reduction in the rate at which prices rise
42
Serial payment are different that fixed annuities as their payments
Increase every year
43
HO 4 policy
Cover tenants personal property against loss or damage and also provides personal liability
44
NAIC national association of insurance commissioners
50 state commissioners exchange ideas and coordinate regulatory activities NAIC makes recommendations for legislation and policy NAIC establishes a solvency policy agenda to strengthen solvency
45
An investment adviser must provide the ADV II 2
Must proved client with a copy or at least brochures with information in part II of the form ADV If not delivered it must be deliver 48 hours before entering into the investment advisory contract or else the client has the right to terminate the contract without penalty for a period of 5 business days
46
The SmL
Is the relationship between rate is return and systematic risk(beta). Optimal portfolio is tangent to SML
47
The semi strong hypothesis states
All publicly available information including stock price history is reflected in current stock price. This makes fundamental analysis not very useful
48
What is the purpose of an investment policy statement? | 2
A written document which establishes the client objectives and lists limitations on the investment manager Can be used as a basis to measure the managers performance against the stated objectives and constraints
49
Commingling of clients funds is?
Permitted if it is permitted by law and you have written authorization to do sowing sufficient record keeping
50
Expansionary fiscal policies
Increase govt spending on foods and services Increase in tax credits(or anything to help tax payer) Increase tax rebates (And example of a monetary policy is federal reserve decrease the reserve requirement)

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