CPE EditionDistributed by The CPE Store

www.cpestore.com1-800-910-2755

PersonalFinancial Planningfor Accountants

Jae K. Shim

Personal Financial

Planning

for Accountants

Course Instructions and

Final Examination

The CPE Store819 Village Square Drive

Tomball, TX 773751-800-910-2755

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Personal Financial Planning for Accountants

Table of Contents

Page Course Objectives .............................................................................................................. 3 Course Instructions ............................................................................................................ 5 Final Examination ............................................................................................................... 7

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COPYRIGHT 2012 - The CPE Store - ALL RIGHTS RESERVED No portion of this material may be reprinted, reproduced, transmitted, stored in a retrieval system, or otherwise utilized, in any form or by any means, electronic or mechanical, including photocopying or recording, now existing or hereinafter invented, nor may any part of this course be used for teaching without written permission from the publisher and the author.

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Course Objectives After completing this course, you will be able to:

Recognize how financial planning can help us Identify steps in the financial planning process Ascertain qualities of financial goals Spot the definition of inflation Select what an 8% unemployment rate would indicate Pinpoint the result of an increased rate of inflation Choose the least important financial issue for the single adult Recognize steps that financial planning for people over sixty should include Identify when you would consider the time value of money as an opportunity cost Select what future value tables are used to determine Pinpoint the correct calculation used to determine the value of an account in 20 years after having

deposited an initial amount of $1,000 and making no further deposits Choose the rule of thumb used to calculate how long it takes to double your investment money Ascertain how the balance sheet describes a family's wealth Recognize the three parts of a personal balance sheet Recognize items which would be considered liabilities Identify items which are considered liquid assets Ascertain the main purpose of a budget Determine how average income of college graduates compares with average income of high school

graduates Recognize what fringe benefits may include Spot the cost savings of working at home Identify websites which are appropriate for job hunting Identify an item which is tax-free and not required to be repaid Recognize a requirement to qualify for a Stafford loan Select the type of loan which is non-need-based Pinpoint a benefit which is available for unmarried full-time students whose parents are disabled or

retired Recognize federal government programs Identify the returns you would expect from your investments Recognize what is included in current income Ascertain what is related to business risk Discern what if considered in deciding risk tolerance Select the investment vehicle with the highest risk and highest rate of return Pinpoint what a beta reading of zero means Discern what is least important when choosing a bank Select who commercial banks are insured by Choose the amount the Emergency Stabilization Act of 2008 increased insurance coverage to Recognize common banking tools (services) Recognize what is reported by Fair Credit Reporting releases Select the best solution when having a problem with your creditor Pinpoint the number of years the information in your credit file may be reported Discern the rule of thumb to be used when limiting your consumer debt payments Identify attributes of the debt/equity ratio Recognize what is included in a FICO score Select which organization launched VantageScore, a credit scoring model Recognize attributes of the bankruptcy law which took effect in 2005 Discern an advantage of buying a hybrid car in order to reduce automotive expenses Recognize what is negotiable when considering leasing Identify what percentage of the purchase price of a home is typical for closing costs Recognize the advantages of owning your own home Discern what is included in closing costs Recognize truths about adjustable rate mortgages (ARMs) Determine which requirements need to be satisfied by an insurance contract Identify the most common risks a consumer must address Discern the features typically included in term insurance Recognize characteristics of whole-life insurance Identify the professional designations that life insurance agents may earn

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Pinpoint the publisher of a ratings guide to the financial stability of the nation's insurers Select the fastest growing segment of the health care industry Recognize what you should do when you have to file a homeowner's claim Discern what damage is covered by an HO-1 policy Identify another insurance credit scoring company along with FICO Discern what you should do before getting started as an investor Recognize what a fixed-dollar investment is Determine sources of financing your investment choices Pinpoint an asset that is considered both highly marketable and highly liquid Recognize what buying on margin is Identify investments not vulnerable to a changing economy Select what corporate ownership is evidenced by Recognize a type of order you may place for stock transactions Calculate your return on a stock Calculate the quarterly return on a dividend Discern what affects the price-earnings ratio Choose what is often used to measure market risk Select what is included in good monetary indicators Recognize examples of fixed income securities Identify the advantages of bonds Recognize the types of bonds Discern the basic factors to consider in selecting a bond Ascertain the typical maturity of a long-term bond Calculate the yield to maturity of a bond purchased at a price above the face value Recognize other fixed income securities, often called short-term parking lots Identify possible advantages of investing in a real estate limited partnership Recognize disadvantages of a limited partnership Choose what federal law requires REITs to do Select what type of REIT is the safest Discern what should be considered when choosing a REIT Pinpoint what mortgage-backed securities that separate mortgage pools into short, medium and long-

term portions are known as Recognize a scenario which would give you the highest return Select another name for a mutual fund Recognize what mutual fund investing is characterized by Identify the term used for the value of a mutual fund's portfolio minus the mutual fund's debt divided by

the number of shares outstanding Choose the typical range of 12(b)-1 fees Pinpoint the name of the charge which might result from redeeming your mutual fund shares Discern what you should consider in picking a "muni" (municipal) fund Recognize the proven risk-reducing strategies for making money in mutual funds Determine the name of the investment strategy designed to take advantage of the market's long-term

upward bias while reducing risk over time Choose when retirement planning should begin Identify the first step in retirement planning Select the most widely used source of retirement income Recognize types of individual retirement plans Pinpoint an option for retirement planning Identify the term for a savings account with an insurance company or other investment company Identify what is involved with estate planning Recognize the term for the legal process that usually involves filing a deceased person's will with the local

probate court, taking an inventory and getting appraisals of the deceased's property, paying all legal debts and eventually distributing the remaining assets and property

Select which event a will is the legal document outlining a plan for

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Course Instructions To fully benefit from this course, please follow all of the steps below. 1. Read each chapter in the text to get a good understanding of the material. 2. Answer the study guide problems which appear at the end of each chapter. After answering the problems,

compare your answers with the correct answers to ensure that you understand the material. 3. When you feel that you have a good understanding of the material contained in the chapter, answer the

questions on the final examination. 4. When you have completed the final examination, record your answers on the answer sheet provided and

submit it for grading. A score of 70% or better is required to pass. Please also complete the course evaluation that accompanied the course and submit it to us along with your answer sheet. Upon passing you will receive a Certificate of Completion stating that you have successfully completed the course and earned the continuing education credit.

Prerequisites and Advance Preparation No prerequisites or advance preparation are required for this course. CPE Credit This course is recommended for 25 CPE credits. Final Exam Grading ► Online: Our fastest option, with instant results. Simply go to www.cpestore.com and click the link for

online grading. Just follow the instructions from there. When you finish entering your answers, you’ll receive instant test results and a Certificate of Completion to print.

► By Mail: Mail your test and course evaluation to us in the envelope provided. We grade the tests the day we

receive them and mail the results and Certificate of Completion to you the following business day. ► By Fax: Please use this option only if you need fast turnaround (we want to keep this as a free service). Just

fax your answer sheet to 1-281-255-4337. If you need us to fax the Certificate of Completion back to you, please provide us with your fax number and write “please fax back” on your answer sheet. If you don’t need the Certificate faxed back, please write “no fax needed” on your answer sheet.

Refunds The CPE Store guarantees your satisfaction. If, for any reason, you are not completely satisfied with your purchase, return it to us unused within 30 days for a prompt refund, no questions asked. (Sorry, but shipping fees are not refundable.) Customer Service The CPE Store holds itself to the highest standards. If we have not met your expectations, something is missing, or you just have a question please contact us at 1-800-910-2755 or customerservice@cpestore.com.

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About Our Courses The CPE Store's courses are developed to satisfy the continuing education requirements of the American Institute of Certified Public Accountants, each state's Board of Accountancy and the National Association of State Boards of Accountancy (NASBA). If your state requires registration of sponsors, our sponsor number will appear on your Certificate of Completion. Our courses are designed to meet the continuing education requirements of accounting professionals. A great deal of care has been taken to ensure that the course material is both interesting and relevant to the practice of accounting. The information presented is, to the best of our knowledge, current and accurate. However, The CPE Store is not in the business of rendering legal, accounting or other professional advice and as such, the material presented in our courses is intended as an overview. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

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Personal Financial Planning for Accountants 25-Hour Course

Final Examination

Answer each question on the accompanying answer sheet. A score of 70% or higher is required to pass the exam. If you score less than 70% on your first attempt, we will allow you to take the test a second time. Chapter 1 – What You Should Know About Financial Planning 1. Financial planning can help us to: A. Control inflation B. Control costs C. Control unemployment rates D. Maximize rebates 2. The first step in the financial planning process is to: A. Define your current financial situation B. Develop a strategy to achieve your goals C. Revise your goals D. Develop a financial plan 3. Which of the following is not a step in the personal financial planning process? A. Determine current financial situation B. Eliminate all personal debt C. Set goals D. Identify alternatives and evaluate alternatives 4. Family financial goals should be: A. Very general in nature B. Realistically attainable C. Individually determined D. Set once for a lifetime 5. Financial goals need not be: A. Specific B. Quantitative C. Attainable D. Prioritized 6. What is the last step in the personal financial planning process? A. Evaluate alternatives B. Identify alternatives C. Review and revise the plan D. Determine current situation 7. Inflation refers to: A. Rising prices and cost of living B. Declining interest rates C. The opposite of wealth D. The opposite of stagflation 8. An unemployment rate of 8 percent would be indicative of: A. An expansion B. A recession C. A recovery D. A depression

Final Exam

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9. As the rate of inflation increases: A. The cost of living goes down B. People on fixed incomes prosper C. Paychecks decrease D. Interest rates increase 10. Which of the following is not an effect of the Federal Reserve lowering the discount rate? A. Cause businesses to borrow and grow B. Stimulate spending C. Decrease rates on mortgages and auto loans D. Decrease retail sales 11. The least important financial planning issue for the single adult concerns: A. Retirement B. Career C. Insurance D. Savings 12. Financial planning for people over sixty should not include: A. Update their pension plan B. Invest to generate stable income C. Invest for long-term appreciation D. Avoid excessive debt 13. Martha is 80 years old. She is most likely concerned with: A. Career B. Taxes C. Estate D. Auto insurance Chapter 2 – Basic Time Value Applications 14. You would not consider the time value of money as an opportunity cost when you do which of the following? A. Spend money B. Outsource C. Save money D. Get a mortgage loan 15. Future value tables are used to determine: A. The amount of a loan B. The premium of an insurance policy C. The compound amount D. The discount amount 16. If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide

you with the value of the account in 20 years? A. Future value of a single amount B. Simple interest C. Present value of a single amount D. Present value of a series of deposits 17. ___________________ is a rule of thumb to figure out how long it takes you to double your investment

money. A. The Rule of 65 B. The Rule of 78 C. The Rule of 72 D. The Rule of the Golden Egg

Final Exam

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Chapter 3 – Personal Financial Statements and Budgeting 18. The balance sheet describes a family's wealth: A. At a certain point in time B. As an annual summary C. As a time period less than one year D. At a future time 19. An abbreviated personal balance sheet would not include: A. Cash and marketable securities B. Certificates of deposit, bonds C. Taxable income D. Stocks, mutual funds 20. The three parts of your balance sheet are: A. Income, liabilities, balance B. Assets, expenditures, balance C. Assets, liabilities, balance D. Assets, liabilities, net worth 21. Liabilities do not include: A. Amounts owed on the mortgage of your house B. Amounts owed for taxes that have not been withheld C. Credit card loans D. Savings bonds owned 22. Which of the following is not a liquid asset? A. Automobile B. Mutual fund C. Cash surrender value of life insurance D. Marketable security 23. A budget is a: A. Purchase plan B. Spending plan C. Line of credit D. Financial statement 24. The main purpose of a budget is to: A. Develop goals B. Develop a financial plan C. Give feedback to the plan D. Help you reach your financial goals Chapter 4 – Career Planning and Financial Success 25. How does the average income of college graduates compare with the average income of high school

graduates? A. They are about the same B. College graduates earn about 1.2 times the amount that high school graduates earn C. College graduates earn about 1.5 times the amount that high school graduates earn D. College graduates earn about 2.8 times the amount that high school graduates earn 26. Fringe benefits may not include: A. Insurance B. Stock option plans C. Low interest loans D. Overtime

Final Exam

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27. The cost savings of working at home do not include: A. No commuting costs B. No dental, medical or life insurance C. No child care fees D. No personal expenses, restaurant lunches 28. _________________________ is not a website for job hunting. A. www.monster.com B. www.careerbuilder.com C. www.linkup.com D. www.dol.gov Chapter 5 – Planning for Your Children’s College Education 29. Which of the following is tax-free and never has to be repaid? A. Grant B. Signature student loan C. Perkins D. Stafford 30. To qualify for a Stafford loan, you must: A. Demonstrate your assets B. Have a good credit rating C. Make satisfactory academic progress D. Have a part-time job 31. _______________________ is a non-need-based loan. A. Stafford B. PLUS C. Perkins D. MINUS 32. Top strategies to maximize aid eligibility do not include: A. Save money in parents’ names, not in child’s name B. Spend down student assets and income first C. Pay off consumer debt, such as credit cards and auto loans D. Minimize contributions to your retirement plan 33. Which of the following is available for unmarried full-time students who are children of disabled or retired

individuals? A. Pell grant B. Perkins loan C. BEOG D. Social Security benefits 34. Federal government programs do not include: A. BEOG B. Family planning grants

C. SEOG D. College work-study programs Chapter 6 – The Return and Riskiness of Your Investments 35. The returns you would expect from your investments could be: A. Risk B. Current investment value C. Current income D. Disposal losses

Final Exam

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36. Current income would not include which of the following? A. Bond interest B. Changes in market value C. Cash dividends D. Rent 37. Security investors incur varying degrees of risk. Business risk is related to: A. Price level changes in the economy B. The debt-to-equity ratio of the firm C. The potential success or failure of the firm D. Security price fluctuations 38. Companies with a great deal of long-term debt would rate fairly high in ____________ risk. A. Market B. Event C. Business D. Financial 39. In deciding your risk tolerance you should not consider: A. Family status B. Age C. Personality D. Intuition 40. Risk and return are ___________ related. A. Inversely B. Directly C. Slightly D. Oppositely 41. The investment vehicle with the highest risk and highest rate of return is: A. Futures B. T-bills C. Savings and CDs D. Corporate bonds 42. Beta is a security’s volatility compared to an average security. A beta reading of zero (0) means: A. The security is twice as risky as the market B. The security’s return is independent of the market C. The security equals the beta value of the market portfolio D. The security is half as volatile as the market Chapter 7 – Banking and Cash Management 43. Which of the following is LEAST important when choosing a bank? A. Recommendations from friends B. Rates and fees C. Hours and services D. Good deals on loans 44. Commercial banks are insured by the: A. Financial Deposit Insurance Association B. Federal Depositors Assurance Corporation C. Federal Deposit Insurance Corporation D. Financial Deposit Insurance Company

Final Exam

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45. The Emergency Economic Stabilization Act of 2008 increased the insurance coverage on all accounts up to ______________.

A. $100,000 B. $200,000 C. $250,000 D. $500,000 46. Which of the following is not a banking regulator? A. The board of governors of the Federal Reserve System B. The state senate committee C. The Federal Deposit Insurance Corporation D. The office of the controller of the currency 47. Banking tools (services) do not include: A. Interest free loans B. Overdraft protection C. ATM and debit cards D. Smart cards Chapter 8 – How to Take On and Manage Debt 48. Fair Credit Reporting releases information about you. Which of the following is not reported? A. Where you live and work B. How you pay your bills C. Whether you have been sued or arrested D. Whether you are healthy or sick 49. If you have a problem with your creditor, the best solution is to: A. File a lawsuit against the creditor B. Solve your problem directly with the creditor C. Complain to the Federal Reserve System D. Complain to the Board of Governors 50. Most of the information in your credit file may be reported for only ______ years. A. 7 B. 9 C. 11 D. 13 51. A good rule of thumb is to limit consumer debt payments to: A. 10 percent of your net monthly income B. 15 percent of your disposable monthly income C. 25 percent of your disposable monthly income D. 30 percent of your disposable monthly income 52. Your debt/equity ratio: A. Is dangerous if it is greater than 1 B. Is acceptable if it stays below 30% C. Need not be calculated for consumer loans D. Is calculated only for credit card debt 53. The elements of credit do not include: A. Character (willingness to pay) B. Circumstances (single, married, other) C. Capacity (cash flow) D. Capital (wealth)

Final Exam

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54. A FICO score or credit score that is computer generated and predicts a lender’s risk, does not include which of the following factors?

A. Payment history B. Assets and income C. Outstanding debt D. Credit history 55. VantageScore, a revised credit scoring model, was launched by: A. Equifax, TransUnion, and Experian B. Dun & Bradstreet C. Value Line D. FICO 56. The bankruptcy law which took effect in 2005: A. Exempts all of a child’s education savings B. Exempts all home equity C. Requires mandatory credit counseling D. Protects a car Chapter 9 – How to Determine and Save on the Cost of Living 57. One of the ways to reduce automotive expenses is to buy a small hybrid car, since it: A. Uses less gas B. Involves fewer payments C. Can be insured through the car dealer D. Uses a car pool lane 58. In leasing, which of the following is not negotiable? A. The term of the lease (usually 24 to 48 months) B. The capitalization cost of the car (sales price) C. The residual or worth of the car at the end of the term D. The manufacturer’s cost Chapter 10 – Where and How You Choose to Live 59. Closing costs are typically what percent of the purchase price of a home? A. 1% to 2% B. 3% to 6% C. 5% to 8% D. 10% to 12% 60. _________ is not an advantage of owning your own home. A. Pride of ownership B. A sense of stability C. A tax shelter D. Reduced cost compared to renting 61. Closing costs do not include: A. Title search and insurance B. Management and advertising fees C. Lender’s review fees and buyers loan points D. Reappraisal fees and credit report 62. Which of the following is false about an adjustable rate mortgage (ARM)? A. Monthly payments can go up if interest rates rise B. There is always a prepayment penalty C. Negative amortization can occur (monthly payment does not cover interest cost) D. Initial interest rates last only until first adjustment

Final Exam

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Chapter 11 – Life, Health, and Property and Liability Insurance 63. An insurance contract does not need to satisfy which of the following requirements? A. Irrevocability B. Offer and acceptance C. Consideration D. Legality 64. _____________________ are not one of the most common risks a consumer must address. A. Personal risks B. Systematic risks C. Property risks D. Liability risks 65. The features of term insurance would not typically include: A. Your dependents get dividends and interest if you serve the term B. Protection for a specific period of time C. Low initial premium D. May be renewable and or convertible 66. Characteristics of whole-life insurance do not include: A. Protection for life B. Fixed premiums C. Growing cash value D. Lower initial premium than term 67. _______________________________ is not a professional designation that life insurance agents may earn. A. Chartered Life Underwriter (CLU) B. Certified Life Planner (CLP) C. Life Underwriter Training Council Fellow (LUTCF) D. Chartered Financial Consultant (ChFC) 68. A ratings guide to the financial stability of the nation's insurers is published by: A. Dow Jones & Company B. Standard & Poor's C. Moody's Rating Service D. A.M. Best Company 69. The fastest growing segment of the health care industry is: A. Fee for service plans B. Medicaid C. Managed care plans D. Medicare 70. When you have to file a homeowner’s claim you should not: A. Report any theft or vandalism to the police B. Immediately call your insurance agent C. Protect your property from further damage D. Settle for the first offer made without a policy review 71. An HO-1 policy does not cover damage from: A. Fire B. Windstorms C. Earthquakes D. Vandalism 72. _________________ is another insurance credit scoring company along with FICO. A. Smartmoney B. ChoicePoint C. CheckPoint D. GEICO

Final Exam

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Chapter 12 – What You Should Know About Investments and Planning 73. Before getting started as an investor you should do all of the following EXCEPT: A. Evaluate your present financial condition B. Consider your income C. Invest your disposable income (prior to paying bills) D. Review future prospects for higher earnings 74. Which of the following is not a fixed-dollar investment? A. Bond B. Preferred stock C. U.S. government security D. Growth mutual fund 75. Sources of financing your investment choices do not include: A. Discretionary income B. Funds owed to the IRS C. Home equity D. Life insurance 76. An asset that is considered both highly marketable and highly liquid is: A. Short-term U.S. government securities B. Real estate C. Common stock D. Long-term U.S. government securities 77. Buying on margin is buying: A. At the lowest price B. At the market price C. With borrowed funds D. By trading currently-owned stock 78. _________ is not an investment at risk with changing interest rates: A. Notes B. Gold and silver C. Mortgages D. Stocks 79. Investments not vulnerable to a changing economy are: A. Bonds B. Stocks C. Mortgages D. CDs Chapter 13 – Should You Invest in Common Stock? 80. Corporate ownership is evidenced by: A. Preferred stock B. Common stock C. Bonds D. Capital gain 81. Types of stock do not include: A. Blue chip stocks B. Miter stocks C. Growth stocks D. Income stocks

Final Exam

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82. ___________ is not a type of order you may place for stock transactions. A. Out-of-order B. Market order C. Open order D. Day order 83. What is your return on a stock if you buy a stock for $30 and sell it for $36, and the annual cash dividend is

$2? A. $6 B. $2 C. $8 D. $12 84. If you invested $80 in a stock which you sold 3 months later for $100 and a $2 dividend was received, then

the quarterly return is ________. A. 27.5% B. 25% C. 2.5%

D. 22% 85. Patsy Banz owns 220 shares of General Mills Corporation. For the last calendar quarter, General Mills

Corporation paid $0.47 a share. What is the total amount she received in her dividend check for this quarter? A. $0.47 B. $47.00 C. $94.00 D. $103.40 86. ____________________ is not a rule of thumb used for stock valuation. A. Present value ratio B. Price-earnings ratio C. Price-free cash flow ratio D. Price-sales ratio 87. Price-earnings ratio is not affected by: A. Growth rate of earnings B. Size of the firm C. Cash flow from operations D. Expected dividends 88. Market risk is often measured using: A. The price/earnings ratio B. The dividend yield C. Alpha D. Beta 89. Good monetary indicators include: A. Dow Jones 20-Bond Index B. CPI C. Volatility index D. Goldman Sachs index Chapter 14 – Should You Invest in Fixed-Income Securities? 90. Examples of fixed income securities do not include: A. Corporate bonds B. Silver certificates C. Government bonds D. Municipal bonds

Final Exam

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91. Which of the following is not an advantage of bonds? A. Fixed interest income each year B. Safer than equity securities C. Safer than common stock D. Voting rights 92. Types of bonds do not include: A. Mortgage bonds B. Debentures C. Classified mint bonds D. Convertible bonds 93. ________ is not one of basic factors to consider in selecting a bond. A. Length of maturity B. Features (call or conversion) C. Tax status D. Treasury bill markings 94. A long-term bond is typically one with what maturity? A. Over 5 years B. Over 10 years C. Over 15 years D. Over 20 years 95. If a bond is purchased at a price above the face value, the yield to maturity is: A. Greater than the stated interest rate B. The same as the stated interest rate C. Less than the stated interest rate D. Zero 96. John Smith is in the 28 percent tax bracket. If he were to purchase a $1,000 municipal bond that had a

stated interest rate of 6.9%, the taxable equivalent yield would be: A. 6.90% B. 8.261% C. 9.583% D. 12.105% 97. Preferred stock, like a corporate bond, has the following features, EXCEPT: A. It provides prior claims on earnings and assets B. Its dividend is fixed for the life of the issue C. It can carry call and convertible features D. It pays interest 98. Other fixed income securities, often called short-term parking lots, include: A. Certificates of deposit B. Income bond C. Treasury bond D. Hedge fund Chapter 15 – Investing in Tangibles: Real Estate and Other Real Assets 99. One of the possible advantages of investing in a real estate limited partnership is that you: A. Don't have to worry about capital gains tax B. Don't have to pay federal income tax C. Don't have to pay state income tax D. Gain entry to a shopping center or large building by investing a small amount of money

Final Exam

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100. Which of the following is not a disadvantage of limited partnerships? A. IRS rulings disallow certain real estate losses B. Tax deductible expenses C. High management charges and costs D. High risk 101. Federal law requires REITs to: A. Distribute at least 95 percent of their earnings to shareholders B. Engage in short-term holdings of real estate C. Register with The U.S. Department of Housing & Urban Development D. Reinvest at least 50 percent of their income in rental properties 102. What type of REIT is the safest? A. Equity B. Mortgage C. Hybrid D. Unit trust 103. When choosing a REIT you should not consider: A. Profitability B. Annual cash flow C. Pride of ownership D. Condition of properties 104. Mortgage backed securities do not include: A. Sally-bills B. Ginnie Maes C. Freddie Macs D. Fannie Maes 105. Mortgage-backed securities that separate mortgage pools into short-, medium-, and long-term portions are

known as what? A. Collateralized mortgage obligations B. Ginnie Maes C. Freddie Macs D. Fannie Maes 106. With all other factors being equal, which scenario would give you the highest return? A. Investing $100,000 in one property B. Investing $50,000 each in two properties C. Investing $25,000 each in four properties D. Investing $10,000 each in ten properties 107. Investing in precious metals does not offer which of the following? A. A hedge against inflation B. A steady income stream C. An opportunity to diversity holdings D. Psychic pleasure Chapter 16 – Mutual Funds and Diversification 108. Another name for a mutual fund is: A. A closed-end investment company B. An open-end investment company C. A mutual investment company D. An open investment company

Final Exam

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109. Mutual fund investing is not characterized by which of the following? A. Diversification B. Large minimum investments C. Automatic reinvestment D. Automatic withdrawal 110. The value of the mutual fund's portfolio minus the mutual fund's debt divided by the number of shares

outstanding is called the: A. Book value B. Outstanding balance C. Per share value D. Net asset value 111. 12(b)-1 fees typically range from: A. 0.25-0.30 percent B. 0.50-1.00 percent C. 1.25-1.40 percent D. 1.50-3.00 percent 112. Redeeming your mutual fund shares might result in a charge called a: A. Back-end load B. Front-end load C. Redemption tax D. Management fee 113. Mutual funds may not include: A. Estate funds B. Money market funds C. Growth funds D. Aggressive growth funds 114. In picking a “muni” (municipal) fund you should not consider: A. Portfolio composition B. Credit quality C. Duration D. Pro-rata 115. Proven risk-reducing strategies for making money in mutual funds do not include: A. Shoot for low-cost funds B. Build a well-balanced, diversified portfolio C. Keep all your investments in one secure fund D. Use the dollar-cost average method 116. An investment strategy designed to take advantage of the market’s long-term upward bias while reducing

risk over time is known as: A. Dollar-cost averaging B. Balanced billing C. Mutual fund investing D. Level term investing Chapter 17 – How to Have Enough Money in Your Pension Plan When You Retire 117. Ideally, retirement planning should begin: A. During the year before retirement B. When the last child has left home C. As soon as the mortgage is paid off D. As soon as possible

Final Exam

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118. The first step in retirement planning is to: A. Determine how large a nest egg is required B. Set retirement needs C. Define your investment program D. Determine your income-earning assets 119. Which one of the following is the most widely used source of retirement income? A. IRAs B. Keogh plans C. Social Security D. Company pension plans 120. Which of the following is not a type of individual retirement plan? A. Employee stock ownership plan B. Keoghs C. Annuities D. IRA 121. A(n) ________________________ is an option for retirement planning. A. Conventional mortgage B. Reverse mortgage C. No-doc mortgage D. Interest-only loan 122. A savings account with an insurance company or other investment company is known as what? A. A money-market mutual fund B. A whole life insurance policy C. An annuity D. A growth stock mutual fund Chapter 18 – Estate Planning: Preserving Your Estate 123. Estate planning involves: A. Considering how your wealth can be most effectively passed on to heirs B. Dissolution of all privately held corporations C. Valuation and auctioning of your valuables D. Planning retirements 124. A legal process that usually involves filing a deceased person’s will with the local probate court, taking an

inventory and getting appraisals of the deceased’s property, paying all legal debts, and eventually distributing the remaining assets and property is known as what?

A. Executory process B. Will settling C. Estate distribution D. Probate 125. A will is a legal document outlining the plan for: A. Your funeral B. Disposition of your assets C. Management of your assets D. Survivor’s goals

Thank you for taking our course. We hope you enjoyed it.

Personal Financial Planning for AccountantsCourse Number: FP119701Qualifies for 25 hours of CPE credit

Name as it should appear on your Certificate: Where should we send your results?

____________________________________________________

License State(s): ____________________________________

License Number: ___________________________________

Date Course Completed: ____________________________

* Answer each question A, B, C, or D as appropriate* Be sure you are answering questions from the "Final Examination" not from the "Study Guide"* For instant online grading, go to www.cpestore.com and click the link for Online Grading

1. 26. 51. 76. 101.

2. 27. 52. 77. 102.

3. 28. 53. 78. 103.

4. 29. 54. 79. 104.

5. 30. 55. 80. 105.

6. 31. 56. 81. 106.

7. 32. 57. 82. 107.

8. 33. 58. 83. 108.

9. 34. 59. 84. 109.

10. 35. 60. 85. 110.

11. 36. 61. 86. 111.

12. 37. 62. 87. 112.

13. 38. 63. 88. 113.

14. 39. 64. 89. 114.

15. 40. 65. 90. 115.

16. 41. 66. 91. 116.

17. 42. 67. 92. 117.

18. 43. 68. 93. 118.

19. 44. 69. 94. 119.

20. 45. 70. 95. 120.

21. 46. 71. 96. 121.

22. 47. 72. 97. 122.

23. 48. 73. 98. 123.

24. 49. 74. 99. 124.

25. 50. 75. 100. 125.

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