The Financial Planning Process Quiz! Trivia

30 Questions | Total Attempts: 2138

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The Financial Planning Process Quiz! Trivia

A financial plan is a comprehensive look at your financial goals and what steps you need to achieve them. Most people typically have the same long-term financial goals: how to save for a college fund, pay a debt, and plan for retirement. This quiz is for everyone interested in creating concrete financial plans. Make sure you obtain your certificate when you are done with the quiz.


Questions and Answers
  • 1. 
    Which of the following does NOT fall within the scope of financial planning?
    • A. 

      Work History

    • B. 

      Equity Assets

    • C. 

      Cash Reserves and Equivalents

  • 2. 
    A common type of Insurance that falls within the scope of financial planning is known as property & ______________ insurance.
    • A. 

      Mortgage

    • B. 

      Renters

    • C. 

      Casualty

  • 3. 
    As you move through the scope of financial planning from Cash Reserves and Equivalents to Income Assets to Equity Assets to Tangible Assets, what happens?
    • A. 

      Risk increase, return decreases

    • B. 

      Risk and return both increase

    • C. 

      Risk and return both decrease

  • 4. 
    The purpose of Cash Reserves and Equivalents is to provide a financial cushion for emergencies, repairs, and other ______________ cash needs.
    • A. 

      Expected

    • B. 

      Unexpected

    • C. 

      Large

  • 5. 
    Which of the following is NOT an example of Cash Reserves and Equivalents?
    • A. 

      Fixed Annuities

    • B. 

      Money Market Accounts

    • C. 

      Life Insurance Cash Values

  • 6. 
    The purpose of Income Assets is to provide a way for investors to obtain  ______________.
    • A. 

      Market Exposure

    • B. 

      Large Returns

    • C. 

      Income

  • 7. 
    Which of the following is an example of an Income Asset?
    • A. 

      Rental Property

    • B. 

      Variable Annuity

    • C. 

      Corporate, Municipal, State & Federal Bonds

  • 8. 
    The purpose of Equity Assets is to provide a way for investors to achieve ______________.
    • A. 

      Capital Appreciation

    • B. 

      Government Garauntees

    • C. 

      Tax Deductions

  • 9. 
    Which of the following is NOT an example of an Equity Asset?
    • A. 

      Income Funds

    • B. 

      Mutual Funds

    • C. 

      Variable Annuities

  • 10. 
    Tangible Assets are __________________ assets.
    • A. 

      Garaunteed

    • B. 

      Tax Advantaged

    • C. 

      Hypothetical

  • 11. 
    Which of the following is an example of a Tangible Asset?
    • A. 

      Stocks

    • B. 

      Oil & Gas Partnerships

    • C. 

      Corporate, Municipal, State & Federal Bonds

  • 12. 
    Improving current standard of living, minimize income taxes and protect family in case of premature death are all examples of ______________ of financial planning.
    • A. 

      Names

    • B. 

      Types

    • C. 

      Goals

  • 13. 
    A typical goal of financial planning is to pass _________________ to surviving family members.
    • A. 

      Debt

    • B. 

      Business interests

    • C. 

      Loans

  • 14. 
    A typical goal of financial planning is to provide for ____________________ in case of disability.
    • A. 

      Minimum estate taxes

    • B. 

      Legal defense

    • C. 

      Ongoing income

  • 15. 
    A typical goal of financial planning is to increase net worth through ____________________.
    • A. 

      Savings and investments

    • B. 

      Borrowing

    • C. 

      Lottery winnings

  • 16. 
    A typical goal of financial planning is to provide funds for children's  ____________________.
    • A. 

      Amusement

    • B. 

      Education

    • C. 

      Child Care

  • 17. 
    What is the traditional primary role of a Registered Representative?
    • A. 

      To coordinate various aspects of clients' financial affairs such as investments, insurance and retirement planning.

    • B. 

      To minimize a client's tax burden through the use of credit sheltered trusts.

    • C. 

      To facilitate, or broker, customer transactions in financial products such as stocks, bonds and mutual funds.

  • 18. 
    What is the traditional primary role of a Financial Planner?
    • A. 

      To coordinate various aspects of clients' financial affairs such as investments, insurance and retirement planning.

    • B. 

      To minimize a client's tax burden through the use of credit sheltered trusts.

    • C. 

      To facilitate, or broker, customer transactions in financial products such as stocks, bonds and mutual funds.

  • 19. 
    What is required for a person to call themselves a financial planner and charge a fee for service?
    • A. 

      A Series 7 liscense

    • B. 

      A Certified Financial Planner (CFP) designation

    • C. 

      Nothing

  • 20. 
    How are Registered Representatives compensated?
    • A. 

      By charging a fee on a percentage of assets managed

    • B. 

      With an up front fee

    • C. 

      By charging a commission on products and services sold

  • 21. 
    A Financial Planner may avoid requesting a copy of a client's tax return to avoid what?
    • A. 

      Charging an unneccessary fee

    • B. 

      Giving tax advice

    • C. 

      Unneccessary work

  • 22. 
    During the Information Gathering & Goal Setting step in the financial planning process, the Financial Planner __________________________.
    • A. 

      Reviews Assets, Liabilities, Current and Projected Income, Insurance Coverage and Investments

    • B. 

      Recommends short and long term investment strategies

    • C. 

      Gathers Quantitative and Qualitative information

  • 23. 
    During the Evaluation step in the financial planning process, the Financial Planner provides an overview of services provided and _____________________.
    • A. 

      Details fees for services

    • B. 

      Outlines investment opportunities

    • C. 

      Recommends stocks

  • 24. 
    A client's financial Action Plan should include what?
    • A. 

      A negotiation of fees

    • B. 

      Time frames and responsibility assignments

    • C. 

      Tentative observations and preliminary recommendations

  • 25. 
    During the Information Analysis & Plan Development step in the financial planning process, the Financial Planner __________________________.
    • A. 

      Reviews legal documents

    • B. 

      Presents the Action Plan

    • C. 

      Monitors the plan

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