Is there anything better than seeing a familiar question on your CFP exam day? It has been found that a few key questions are repeated in practically most CFP exams for consecutive or alternate years. As a result, if you solve sample CFP past papers from prior years, you will have a good probability of seeing familiar questions in your actual CFP exam. Solving previous years CFP papers will certainly raise your self-assurance.
Solve these ten sample questions from the subject- Psychology of financial planning by CFP Exam Prep by Achieve to increase the probability of seeing more such questions in the CFP test.
Q 1. “People typically naively diversify their investment funds, tending to allocate 1/n of the total to each of n available instruments.” What is described by the statement above?
Q 2. “Investors mentally start with an equal split of the amount to be invested among all given categories……and subsequently adjust the allocation (insufficiently) to take the different attractiveness of the categories into account.” Which bias matches the statement above?
Q 3. Assume you purchased Rex Inc. on March 1, 2021 and want to sell it since it increased in price. After a quick thought you recognize that you bought it earlier, in Dec. 2020. Now you decide to keep Rex Inc. instead. How is this behavior called?
Q 6. Which theory argues that investors fear losses more than they value gains, according to the principles of behavioural finance? As a result, investors will often choose the smaller of two potential gains if it avoids a highly probable loss.
Q 10. A financial plan is being presented to a client by a CFP® professional today. The client believes that due to his considerable wealth, there is little he cannot accomplish. However, the planning process revealed that several of the objectives were impractical. In which stage of the financial planning process are unrealistic goals addressed?
A. Presenting the financial planning recommendations.
B. Obtaining qualitative and quantitative information.
C. Identifying and selecting goals.
D. Analyzing the client’s current course of action.
Practicing CFP Practice questions with a time constraint allows you to respond to problems more quickly. Solving questions from CFP Exam Prep By Achieve can help you raise your confidence, and also, at the time of the Certified Financial Planner exam, you may feel that you are solving questions from the app itself.