1. Which of the following is NOT a true statement regarding “Propensity to Consume”? Select one: a. Your average propensity to consume is the percentage of each dollar of income, on the average, that is spent for current needs rather than savings. b. Average propensity to consume is best described as how much of your money you plan to save in your financial plan. c. A person making $35,000 and spending $30,800 has an average propensity to consume of 88%.  d. Generally, as income rises, the average propensity to consume decreases. e. Two persons with equal average propensities to consume will not necessarily have equal standards of living because of differences in income.  2. The ratio that is calculated by dividing your total monthly loan payments by your monthly gross income is called the: Select one:  a. Debt Service Ratio b. Solvency Ratio  c. Liquidity Ratio  d. Income Ratio  3. The term most closely associated with quality of life is: Select one:  a. Standard of Living b. Money  c. Education  d. Wealth e. Consumption  4. The following would represent qualitative data obtained by a planner during a data-gathering session: . . . (1) The primary and contingent beneficiaries of the client's life insurance policies . . . (2) The amount and type of life insurance included in the client's employee benefits package . . . (3) The age at which the client hopes to retire . . . (4) The client's established gifting strategy to his grandchildren's college fund over the next 10 years . . . (5) The fact that the client's wife is expecting a significant inheritance within 10 years, which they feel will decrease their need to contribute currently to a retirement plan Select one: a. (1), (3) and (5)  b. (2), (3) and (4) c. (1), (2) and (4)  d. (3) and (5)  e. (3), (4) and (5)  5. Which of the following economic concepts is/are correctly represented? . . . (1) Income is a prime factor impacting demand within the economy. . . . (2) The Substitution Effect states that as the cost of goods rises, consumers reduce or cease consumption. . . . (3) Price is considered the most important factor affecting demand. . . . (4) Changes in Gross Domestic Product measure economic growth. . . . (5) Our federal deficit is the cumulative result of spending that exceeds revenue. Select one: a. All of the 5 offered responses are correctly represented.  b. (1), (3) and (4) c. None of the 5 offered responses are correctly represented.  d. (2) and (4) only  e. (2), (4) and (5)  6. The following would represent quantitative data obtained by a planner during a data-gathering session: . . . (1) The primary and contingent beneficiaries of the client's life insurance policies . . . (2) The amount and type of life insurance included in the client's employee benefits package . . . (3) The age at which the client hopes to retire . . . (4) The client's established gifting strategy to his grandchildren's college fund over the next 10 years . . . (5) The fact tha.

1. 1. Which of the following is NOT a true statement regarding
“Propensity to Consume”? Select one:
a. Your average propensity to consume is the percentage of each
dollar of income, on the average, that is spent for current needs
rather than savings.
b. Average propensity to consume is best described as how
much of your money you plan to save in your financial plan.
c. A person making $35,000 and spending $30,800 has an
average propensity to consume of 88%.
d. Generally, as income rises, the average propensity to
consume decreases.
e. Two persons with equal average propensities to consume will
not necessarily have equal standards of living because of
differences in income.
2. The ratio that is calculated by dividing your total monthly
loan payments by your monthly gross income is called the:
Select one:
a. Debt Service Ratio
b. Solvency Ratio
c. Liquidity Ratio
d. Income Ratio
3. The term most closely associated with quality of life is:

2. Select one:
a. Standard of Living
b. Money
c. Education
d. Wealth
e. Consumption
4. The following would represent qualitative data obtained by a
planner during a data-gathering session: . . . (1) The primary
and contingent beneficiaries of the client's life insurance
policies . . . (2) The amount and type of life insurance included
in the client's employee benefits package . . . (3) The age at
which the client hopes to retire . . . (4) The client's established
gifting strategy to his grandchildren's college fund over the next
10 years . . . (5) The fact that the client's wife is expecting a
significant inheritance within 10 years, which they feel will
decrease their need to contribute currently to a retirement plan
Select one:
a. (1), (3) and (5)
b. (2), (3) and (4)
c. (1), (2) and (4)
d. (3) and (5)
e. (3), (4) and (5)
5. Which of the following economic concepts is/are correctly
represented? . . . (1) Income is a prime factor impacting demand

3. within the economy. . . . (2) The Substitution Effect states that
as the cost of goods rises, consumers reduce or cease
consumption. . . . (3) Price is considered the most important
factor affecting demand. . . . (4) Changes in Gross Domestic
Product measure economic growth. . . . (5) Our federal deficit is
the cumulative result of spending that exceeds revenue. Select
one:
a. All of the 5 offered responses are correctly represented.
b. (1), (3) and (4)
c. None of the 5 offered responses are correctly represented.
d. (2) and (4) only
e. (2), (4) and (5)
6. The following would represent quantitative data obtained by
a planner during a data-gathering session: . . . (1) The primary
and contingent beneficiaries of the client's life insurance
policies . . . (2) The amount and type of life insurance included
in the client's employee benefits package . . . (3) The age at
which the client hopes to retire . . . (4) The client's established
gifting strategy to his grandchildren's college fund over the next
10 years . . . (5) The fact that the client's wife is expecting a
significant inheritance within 10 years, which they feel will
decrease their need to contribute currently to a retirement plan
Select one:
a. (3), (4) and (5)
b. (2), (3) and (4)
c. (1), (4) and (5)

4. d. (3) and (5)
e. (1), (2) and (4)
7. The following are methods by which the Fed interacts with
our economy: . . . (1) Periodically making adjustments to the
CPI . . . (2) Establishing the exchange rate of the US dollar,
relative to specific foreign currencies . . . (3) Initiating
purchases and sales of US Government securities . . . (4) Setting
the rates that banks are allowed to charge their customers . . .
(5) Raising or lowering of discount rate charged to member
banks Select one:
a. (1), (3) and (4)
b. (1), (4) and (5)
c. Options 1, 2, 3, 4, and 5 are all true statements.
d. (3) and (5) only e. (4) and (5) only
8. Which of the following statements is/are TRUE regarding the
preparation of a personal balance sheet? . . . (1) Home
appliances purchased on credit should be included on the
liability side of the balance sheet. . . . (2) All assets should be
reflected on the balance sheet at their original cost. . . . (3)
Your leased auto would be shown as an asset during the entire
term of the lease. . . . (4) Money contributions to one's 401(k)
are shown as a liability. . . . (5) A set of tires charged to your
Visa account would not be shown as a liability on your balance
sheet until your Visa bill has been received. Select one: a. (4)
and (5)
b. (2) only
c. None of the 5 offered responses are true.

5. d. (1), (3) and (5) e. (1), (2) and (3)
9. Which of the following statements is/are TRUE concerning
use of ratios in evaluating financial solvency? . . . (1) A cash
surplus on the Income/Expense Statement would typically
produce a positive savings ratio. . . . (2) A family with an
increasing debt service ratio would automatically also reflect a
negative savings ratio. . . . (3) The liquidity ratio is an indicator
of a family's ability to pay current debts if there is an
interruption in income. . . . (4) One would be improving one's
financial situation when the savings ratio is increasing and the
debt service ratio is decreasing. . . . (5) The savings ratio is
useful in the evaluation of the balance sheet. Select one:
a. (1), (2) and (3)
b. (2) only
c. (2) and (3) only
d. (1), (3) and (4)
e. (2), (4) and (5)
10. Malcolm buys a valuable painting for $20,000. He purchases
it using $15,000 from his savings account and a $5,000 loan.
How does the transaction affect Malcolm's current financial
statement? (You may disregard any potential future impact of
depreciation/appreciation.) . . . (1) His assets decrease, and his
liabilities increase . . . (2) Both his assets and liabilities
increase . . . (3) His net worth increases. . . . (4) His net worth
decreases . . . (5) His net worth stays the same. Select one:
a. (1) and (4)

6. b. (1) and (5)
c. (2) and (5)
d. (1) and (3)
e. (2) and (4)
11. Kip has purchased a gold coin set for $30,000. He purchases
it using $20,000 from his savings account and a $10,000 loan.
How does the transaction affect Kip's current financial
statement? (You may disregard any potential future impact of
depreciation/appreciation of the purchased asset.) . . . (1) Both
his assets and liabilities increase . . . (2) His assets decrease,
and his liabilities increase . . . (3) His net worth stays the same.
. . . (4) His net worth increases. . . . (5) His net worth decreases.
Select one: a. (1) and (3) b. (1) and (4) c. (2) and (4) d. (2) and
(5) e. (2) and (3)
12. Which of the following would not be an appropriate entry in
the "Assets" Section of your financial statement? Select one:
a. Your primary residence which has $48,000 mortgage against
it
b. Your leased Toyota Four-Runner
c. Your 5 year old bass boat which was a gift from your father-
in-law
d. A duplex located in another state from which you derive
rental income
e. 50 shares of stock of a local business which is not traded on
any of the national exchanges.

7. 13. The financial ratio that is calculated by dividing your total
monthly loan payments by your monthly gross income is called
the: Select one:
a. Debt Service Ratio
b. Solvency Ratio
c. Income Ratio
d. Liquidity Ratio
[This case scenario applies to the next three questions.] The
Clark family disclosed the following information on their data
gathering form: (You may assume that there are no other assets
or liabilities to be considered.) Income Gross Monthly Income .
$ 4,000 Monthly Take Home Pay . $ 3,000 Assets Checking
Account . $ 1,000 Passbook Savings . $ 500 Money Market . $
1,000 Retirement Account (Vested Balance) $ 20,000 . (Market
Value) $ 30,000 Residence (Market Value) $100,000 . (Basis) $
80,000 Personal Property . $ 10,000 Boat . $ 10,000 Liabilities
Current Liabilities: . . . . . . Private School Tuition Balance . $
150 . . . . Homeowner's Insurance Premium . $ 314 . . . . Major
Credit Card @ $50/month $ 400 . . . . Auto Repair Bill . $ 150 .
. . . Boat Loan @ $110/month $ 1,000 Long Term Liabilities: . .
. . . . Primary Residence Mortgage @ $432/month $ 75,000
14. What is the amount of the Clark's net worth? Select one:
a. $75,486
b. $65,486
c. $63,986
d. $175,486

8. 15. Using the information from the Clark's data gathering form
in the previous question, the Clark's liquidity ratio shows that
they could maintain their current debt structure in the event of
an emergency for about _____ months. Select one:
a. 18
b. less than 5
c. 23
d. 8
16. (Continuing to use the information from the Clark's data
gathering form in the previous question ...) The Clarks want to
purchase an auto. They are considering refinancing their home.
They plan to borrow $90,000, with which they will liquidate all
existing liabilities reflected in the case study (both current and
long term); and they will purchase an $11,000 auto. They have
negotiated a 7% loan for 30 years with $1,986 in closing costs.
Which of the following statement are true regarding the results
of the financial repositioning for the Clarks? . . . (1) Based on
the standard debt-service ratio qualification standards, the
Clark's income would qualify them for this loan. . . . (2) The
anticipated loan to value ratio would require the payment of
private mortgage insurance. . . . (3) Following the completion of
these transactions, the Clark's net worth would decrease (not
considering depreciation). . . . (4) Following these transactions,
the Clark's solvency ratio would be improved. Select one:
a. (1), (2) and (3)
b. (2), (3) and (4)
c. (1) and (2)

9. d. All of the above
e. (1), (2) and (4)
17.The promised rate of interest paid on a savings account or
charged on a loan is the: Select one:
a. Effective interest
b. Nominal interest
c. Discounted interest
d. Direct interest
18. The following are true statements concerning the process of
financial planning for the CFP® practitioner: . . . (1) The
Certified Financial Planning Practitioner has social, legal and
ethical responsibilities to his/her planning clients. . . . (2) The
Certified Financial Planning Practitioner is considered to have a
fiduciary relationship with his/her clients. . . . (3) Only planners
practicing the comprehensive view of planning meet the
definition of "financial planner". . . . (4) The planning process
is finite, therefore a specific beginning point (the engagement)
and an end (the delivery of the plan document) must be
established in every planning relationship. . . . (5) The planner,
in some cases, may be able to save the client money by
performing comprehensive tasks that had previously been
assigned to other professionals, such as the client's banker,
accountant and attorney. Select one:
a. All of the above
b. (1) and (2) only

10. c. (1), (3) and (5)
d. (1) and (3) only
e. (1), (2) and (4)
19. Janet is a new client. She is considering buying a house and
provided the following information during your data gathering
process: . . . Annual gross income: $100,000 . . . Annual
Principal and Interest Payments on the anticipated mortgage:
$14,000 . . . Annual anticipated Premiums for Homeowners and
Flood Insurance: $1,000 . . . Annual Property taxes: $5,000 . . .
Annual Living Expenses: $40,000 . . . Annual Credit Card
Payments on existing debt: $12,000 . . . Annual Contribution to
Retirement Account: $5,000 . . . Annual Student Loan Payments
for next 10 years: $5,000 . . . Annual Car Payments for next 2
years: $6,000 Using the standard housing qualification ratios
which we have discussed, which of the following comments
would you say are true regarding Janet's ability to qualify
financially for this purchase? Select one:
a. Both the first and second ratios are outside the
normal/acceptable range.
b. The second ratio is within normal/acceptable range, but the
first ratio is not.
c. Both the first and second ratios are within the
normal/acceptable range.
d. The first ratio is within normal/acceptable range, but the
second ratio is not.
20. Kathy's gross annual income is $58,900 and her monthly
recurring debts are $325. She can put a down payment of no
more than $35,000, but does not want to pay Private Mortgage

11. Insurance. Based on the standard home affordability ratios,
approximately what is the maximum price home that Kathy
should be looking at? (Assume that the taxes and insurance will
be $1800 annually and that she will be able to obtain a 30 year
loan with a 10% interest rate) Select one:
a. $225,000
b. $139,500
c. $156,000
d. $174,000
21. In evaluating financial statements, which of the following
statements is/are correct? . . . (1) A balance sheet shows
financial condition over a period of time. . . . (2) A budget is a
detailed statement of what income and expenses have occurred
over a particular past period. . . . (3) A realized net cash flow
deficit on the budget statement is reflected on the balance sheet
as an increase in net worth. . . . (4) The net worth statement is
most similar to the balance sheet. . . . (5) The income and
expense statement provides a measure of financial performance
tied to a specific date (e.g., 12/31/2012) Select one:
a. (1), (4) and (5)
b. (2), (3) and (5)
c. (4) only
d. (3) only
e. All 5 statements are correct.
22. Which of the following statements are FALSE concerning

12. educational funding? . . . . (1) Lifelong Learning Credit,
American Opportunity Credit, distributions from "QTP/529
Plans" and distributions from ESAs may all be taken in the same
tax year, provided they do not overlap qualifying expenses. . . .
. (2) Contributions to a "QTP/529 Plan" are identified by donor,
rather than by beneficiary. . . . . (3) "QTP/529 Plan" account
balances are limited by statutory maximum, which includes both
principal and accrued interest. . . . . (4) "Plus" Loans are made
to Undergraduate students only. . . . . (5) The Uniform
Gift/Transfers to Minors Act (UTMA and UGMA) allows the
minor recipient/student to act as the custodian/trustee for
his/her own account. Select one:
a. (2), (4) and (5)
b. (2), (3) and (5)
c. (1), (3) and (4)
d. All of the above statements are false.
e. (1) and (2)
23. Which of the following strategies for education
accumulation do NOT offer tax deferred accumulation? . . . . (1)
State sponsored "529" Savings Plans . . . . (2) Educational Trust
with Crummey powers . . . . (3) EE Savings Bonds . . . . (4)
Education IRAs . . . . (5) Passbook savings account established
under the Uniform Transfer to Minors Act Select one:
a. (2), (4) and (5)
b. All of the strategies offer tax deferred accumulation
c. (2) and (5)

13. d. (2), (3) and (5)
e. (1) and (2)
24. Which of the following represent(s) true statements
concerning educational funding? . . . . (1) Assets deposited to a
2503(b) Trust may remain within the trust beyond the
beneficiary's age of majority. . . . . (2) Contributions to a
"QTP/529 Plan" are identified by beneficiary, rather than donor.
. . . . (3) "QTP/529 Plan" account balances are limited by
statutory maximum, which includes both principal and accrued
interest. . . . . (4) Educational IRAs no longer impose a phase-
out for donor eligibility, based on income. . . . . (5) Lifelong
Learning Credit, American Opportunity Credit, distributions
from "QTP/529 Plans", and distributions from ESAs may all be
taken in the same tax year, provided that they do not overlap
qualifying expenses. Select one:
a. (1) and (2)
b. (2) and (5)
c. (2), (4) and (5)
d. (1), (3) and (4)
e. (2), (3) and (5)
25. Which of the following is/are TRUE statement(s) regarding
methodologies of college funding? . . . . (1) The interest
expense deduction on education loans is subject to phase-out
based on modified adjusted gross income. . . . . (2) The
American Opportunity Credit is no longer limited to the first
two years of post-secondary education, but is contains other
limitations such as eligible expenses, and income. . . . . (3)
Scholarship monies for room and board are generally taxable to

14. the recipient. . . . . (4) College cost inflation has historically
outpaced the consumer price index. . . . . (5) Federal Perkins
loans are needs-based. Select one:
a. (1), (2), (4) and (5)
b. (1), (4) and (5)
c. (1), (3) and (5)
d. (2), (3) and (4)
e. All of the responses are true.
26. According to the CFP® Code of Ethics, everything must be
disclosed in writing except: Select one:
a. Full responsibilities and obligations of each party
b. Date and duration of plan
c. Names of each party involved
d. Terms of terminating the agreement
27. Bruce Morton's firm, Morton Asset Management, is
registered with the SEC as an investment adviser. His associate,
Bill Collins, sells only life insurance. Which of the following is
permissible usage? Select one:
a. Bruce Morton, RIA
b. None of the above
c. Both B and C

15. d. Bruce Morton, Registered Investment Adviser e. Bill Collins,
Investment Counselor
28. The following would generally be required to "register" as
investment advisor(s), based on the Investment Advisors Act of
1940: . . . (1) An insurance agent who performs limited
planning activities in conjunction with the sale of life insurance
and who is compensated by commission on products sold from
these planning activities. . . . (2) A "Private Advisor" who
maintains an office, and manages money on a fee-basis for only
25 clients; accepting new clients only if an existing client
terminates the relationship, thereby creating a "vacancy". . . .
(3) An accounting firm that establishes a separate division to
provide financial planning services to their clients and who
charges separately for these planning services. . . . (4) A
member of the clergy who provides financial planning and
investment seminars for his parishioners free of charge. . . . (5)
A retired stock broker who sells private non-registered church
bonds to residents of his state, and who is compensated by a
fee, equal to a percentage of the bonds sold. Select one:
a. (2) and (3) only
b. (1), (2) and (5)
c. (1), (3) and (5)
d. All of the above
e. None of the above
29. Matthew Connifer's firm (Connifer Wealth Management) is
registered with the SEC as an investment adviser. His brother,
Peter Connifer, is also with the firm but sells only life and
health insurance. Which of the following is permissible usage? .
. . (1) Connifer Wealth Management, RIA . . . (2) Matthew

16. Connifer, RIA . . . (3) Peter Connifer, Investment Counselor . . .
(4) Matthew Connifer, Registered Investment Advisor Select
one:
a. None of the offered responses would be permissible.
b. (3) and (4)
c. (3) only
d. (1), (2) and (4)
e. (1) only
30. Ted Peters operates a small financial services office in the
state of Florida. His practice over the past ten years has been
limited to the sale of term life and health insurance for which he
is licensed with the State of Florida and receives commission.
He has decided to broaden the scope of his practice to include
investment and tax planning advice, but will limit the
investment products he sells to fixed and variable annuities and
variable life insurance. He plans to include the phrase "Tax and
Investment Planning" on his business cards and anticipates
charging a separate fee for his financial advice, although he
does not anticipate directly managing any client assets. What
new licensing/registration will be required for Ted? Select one:
a. Registration with both the State of Florida and SEC as an
RIA because he will be holding himself out to the public as a
financial advisor.
b. None, because he will only be selling life insurance products
for which he is already licensed with the State of Florida.
c. Registration with the SEC as an RIA since he plans to charge
fees for advice; licensing with FINRA due to the anticipated

17. sale of variable annuities and variable life.
d. Licensing with the FINRA due to the sale of variable life and
variable annuities. Since he does not plan to manage assets
directly, no registration as an RIA is required.
e. Registration with the State of Florida because he plans to
charge advisory fees and licensing with FINRA due to the sale
of variable annuities and variable life.
31. If an RIA has more than ___________ of assets under
management, the RIA must register with the SEC. Select one: a.
C) $90 million b. E) The RIA must register with the SEC at any
level of assets under management. c. A) $25 million d. D) $125
million e. B) $50
32. Which of the following statements concerning special types
of bonds is (are) correct? . . . . (1) Serial bonds are issued at a
specific time, but come due at different maturity dates. . . . . (2)
Zero coupon bonds pay all interest in a lump sum at maturity. . .
. . (3) There is no tax on zero coupon bonds until they mature. .
. . . (4) Junk bonds pay above average yield because they have
above average risk. Select one: a. (1), (2) and (4)
b. (1) and (2)
c. (2) and (3)
d. (2) and (4)
e. All of the above
33. All of the following statements concerning unsystematic
risk are correct EXCEPT: Select one:
a. It may be affected by changes in consumer preferences and

18. the competence of the firm's management.
b. It is that portion of the total risk that is unique to the
particular firm.
c. Such risk may be independent of factors affecting other
industries.
d. It cannot be reduced by diversification.
33. Which of the following statements concerning terms relating
to common stock is/are correct? . . . . (1) A beta of (-1)
indicates that a stock has greater market volatility than a stock
with a beta of 1. . . . . (2) Total book value of a company's
common stock is the value of total assets minus liabilities and
minus the value of any preferred stock. . . . . (3) Earnings per
share equal total after-tax earnings plus preferred dividends (if
any) divided by the total number of shares of common and
preferred stock outstanding. . . . . (4) Liquidation value for a
company will usually be less than the market value of its
common stock. . . . . (5) Preferred stock has a maturity date
similar to a bond. Select one:
a. (2) and (4)
b. (1), (3) and (4)
c. All of the above
d. (1), (3) and (5)
e. (2), (3) and (4)
34. Your new client, Mr. Lindsey (age 30), has asked you to
evaluate his life insurance needs. (He has none currently.) He
feels that his family would need to replace his current income

19. ($60,000 per year, to be funded at the beginning of each year)
until his youngest child completes college (15 years from now).
If he assumes an inflation rate of 4.5% and an after-tax yield of
10% (compounded annually), what amount of life insurance will
you advise Mr. Lindsey that he will need to purchase to
adequately cover his goal? Select one:
a. $950,000
b. $850,000
c. $750,000
d. $650,000
e. $550,000
35. Which of the following is/are characteristic(s) of Universal
Life? . . . . (1) The policy is backed by a portfolio of long-term
investment vehicles with varying maturities. . . . . (2) The death
benefit amount must remain level throughout the life of the
policy. . . . . (3) The interest rate applied to the cash fund is not
guaranteed and varies over the life of the policy. . . . . (4) Death
benefit may be guaranteed in some contracts by paying
premiums higher than target. . . . . (5) The Death benefit must
always exceed the cash value by a stipulated amount, or the
policy will cease to meet the definition of a life insurance
policy. Select one:
a. (2) and (5)
b. All of the above
c. (3), (4) and (5)
d. (1), (2), (3) and (5)

20. e. (1) and (3)
36. The renewal provisions of various types of health insurance
policies may be structured as any of the following: . . . . (1)
Renewable at the option of the insurer. . . . . (2) Guaranteed
renewable. . . . . (3) Conditionally renewable (with proof of
continued good health at each renewal). . . . . (4) Specific and
guaranteed increases annually, based on CPI. . . . . (5)
Noncancellable. Select one:
a. (3), (4), and (5)
b. (1), (2) and (3)
c. All of the above
d. (1), (2) and (5) e. (2), (4) and (5)
37. The following are characteristics of a qualified retirement
plan: . . . . (1) Employers can deduct the contributions . . . . (2)
Employees do not pay taxes on the employer contributions until
funds are withdrawn . . . . (3) Employee contributions may or
may not reduce taxable income in the year made . . . . (4)
Earnings on both employee and employer contributions are tax
deferred. Select one:
a. All of the above
b. (1), (3) and (4)
c. (1), (2) and (4)
d. (1), (2) and (3)
38. The following are TRUE statements relating to planners'

21. concerns regarding retirement planning: . . . . (1) Most
retirement planning clients expect to lower their lifestyle in
retirement. . . . . (2) The top source of retirement income in
America is income from the retiree's employer-sponsored
retirement plan. . . . . (3) Retirement goal analysis must include
the following considerations: time horizon, retirement cash flow
needs, and assets committed to the goal. . . . . (4) Withdrawal of
funds from most tax-qualified retirement plans must begin no
later than April 1 of the year the retiree turns 70. . . . . (5)
Penalty free withdrawals may be made from some retirement
accounts for special uses such as first time home purchases and
qualifying educational expenses. Select one:
a. (2), (4) and (5)
b. (3) and (5) only
c. (2) and (3) only
d. (1), (2) and (3)
39. Social Security Retirement benefits received in 2016 by a 67
year old may be reduced if: . . . . (1) Wages and salaries exceed
certain limits . . . . (2) Interest income exceed certain limits . . .
. (3) Assets exceed $60,000 . . . . (4) A younger spouse's income
exceeds certain limits Select one:
a. (1), (3) and (4)
b. (1) and (2)
c. None of the above
d. All of the above
e. (1) only

22. 40. Which of the following is/are among the advantages of a
revocable living trust? . . . . (1) Future growth of the asset
placed in trust is excluded from the grantor's estate . . . . (2)
Federal estate tax savings because property is removed from the
grantor's gross estate . . . . (3) Avoidance of the cost and
publicity associated with probate for assets placed in the trust .
. . . (4) Savings in income taxes for the grantor, regardless of
tax bracket . . . . (5) The grantor can retain control over the
assets Select one: a. (1), (2) and (3) b. (4) and (5) c. (2), (3) and
(4) d. All of the above e. (3) and (5) Which of the following
is/are among the advantages of an irrevocable living trust? . . . .
(1) Savings in income taxes for a grantor, regardless of tax
bracket . . . . (2) Federal estate tax savings because property is
removed from the grantor's gross estate . . . . (3) Avoidance of
the cost and publicity associated with probate . . . . (4) The
grantor can retain control over the assets . . . . (5) Future
growth of the asset placed in trust is excluded from the grantor's
estate Select one:
a. (2), (3) and (4)
b. (2), (3) and (5)
c. (1), (2) and (3)
d. (3), (4) and (5)
e. All of the above