Free Online CFP Questions – General Principles of Financial Planning

cfp exam sample questions

Are you aware of how an excellent strategy genuinely aids in increasing your CFP exam score? Practicing CFP questions is a crucial part of your Certified Financial Planner exam preparation that will boost your score.

After a certain period has passed, you tend to forget a subject/topic. This issue could be solved by thoroughly practicing and revising the CFP topics. Here we are providing you with ten sample CFP Practice questions from the subject – “General Principles of Financial Planning” to help you strengthen the concepts.

Q 1. Pedro makes over a million dollars a year and lives in a place where 529 Plan payments are tax deductible. His daughter is a private high school student who has received multiple scholarship offers. What is Pedro’s best educational option? 
A. Contribute to a 529 Plan, take the state tax deduction, and use the assets in 529 Plan to pay qualified educational expenses as a tax-free distribution
B. Contribute to a Roth IRA for college for his daughter
C. Create a SEP and fund it to the maximum 
D. Contribute $130,000 to a Pre-Paid 529 Plan 
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Q 2. Two children, ages 5 and 7, live with their parents. The couple wants to set up and fund a Section 529 Qualified Tuition Plan for each of their children, and they need an estimate of how much it would cost. They have expressed a wish to fund each child’s public, in-state tuition for four years. Tuition, including room and board, is currently $20,000 per year on average. What further information is required to make an educated cost estimate? 
A. Projected investment return
B. Home equity or retirement assets
C. Client’s projected income
D. Historical tuition inflation rate
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Q 3. Mark and Daisy have been investing $1,000 semi-annually each year since their daughter Lucy was born and they made a lump sum deposit of $4,000, with plans to use the money for Lucy’s college education. How much would the account be worth in 18 years when Lucy starts college if the funds earn an annual rate of 8% compounded semiannually at the start of the period? 
A. $97,117.98
B. $85,956.14
C. $72,598.07
D. $91,028.53
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Q 4. Nina borrowed $14,000 from her parents to purchase a car, with the promise of repaying them in five years. How much should she pay to settle the debt if she may make a lump-sum payment now and it is discounted at an annual rate of 8% compounded semiannually?
A. $7,134.67
B. $6,592.91
C. $9,457.90
D. $8,617.03
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Q 5. Which of the following statements about contributions to educational institutions or medical care providers is/are correct? (1). Gifts made directly to an educational institution or medical care provider are not taxable gifts.(2). The gift tax applies to gifts made first to a donee, who then pays an educational institution or a medical care provider. 
A. (l) only
B. (2) only
C. None of the above
D. All of the above
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Q 6. Ion Corporation reported $72,000 in total expenses and $90,000 in net profits in 2021. How much cash was received from customers if accounts receivable reduced by $12,000? 
A. $102,000
B. $150,000
C. $162,000
D. $174,000
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Q 7. Dan acquired a 15-year loan in the amount of $250,000. If the interest rate is 4.8%, what will be the principal balance after the first monthly payment of $1,951.04?
A. $248,912.14
B. $249,048.96
C. $249,224.36
D. $249,308.28
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Q 7. The total of personal consumption, gross private domestic investment, government expenditure, and net exports equals which of the following? 
A. Recession
B. Personal income
C. Business cycle 
D. Gross domestic product
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Q 8. Which of the following describes actions taken by the Federal Reserve and their effect on the money supply?
(1) If the Federal Reserve sells government securities, it receives money in return, which increases the money supply.
(2) If the Federal Reserve sells government securities, it is considered contractionary policy.
A. (l) only
B. (2) only
C. None of the above
D. All of the above
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Q 10. Place the following steps of the financial planning process in the correct order:
(1) Presenting the Financial Planning Recommendation
(2) Understanding the Client’s Personal and Financial Circumstances
(3) Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action
(4) Implementing the Financial Planning Recommendation
(5) Identifying and Selecting Goals
(6) Developing the Financial Planning Recommendation
(7)Monitoring Progress and Updating
A. 2, 3, 5, 6, 1, 4, 7
B. 2, 5, 3, 6, 1, 4, 7
C. 2, 5, 3,1, 6, 4, 7
D. 5, 2, 3, 6, 1, 4, 7
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No one can overlook the need for practice when preparing for the CFP exam. Solving problems is certainly the most effective technique to complete your Certified Financial Planner syllabus. Solving sample questions from the CFP Exam Prep by Achieve allows you to get a more in-depth look at the knowledge you have already acquired and identify any remaining gaps so that you can do well on your exam day.