2 mark questions

Q 1.Which of the following functions permitted by the Reserve bank of India for banks are
also permitted for an entity to act in the capacity of a Non Banking Finance Company in
India?
1. It can engage in the business of accepting demand deposits as well as time deposits.
2. It can incorporate itself either under the Banking Companies Act or the Companies Act
depending upon the specific business activity.
3. It can engage in the business of loans and advances, acquisition of shares, debentures,
stocks, bonds and government securities.
4. It can indulge in agricultural and industrial activities as well as in construction of
immovable property.

Q 2.Anjuman, after seeing the use of CFPCM mark with your name, wants to know which
entity in India is licensed to award CFPCM Certification. You tell him the name of
organization as .
1. financial Planning Standard Board India or FPSB India
2. Financial planning standardized board’s
3. Financial Planning Standards Board or FPSB
4. Financial Planning Standards Board, India

Q 3.While preparing Financial Plan for Anjuman you have ensured that all the significant
recommendations are made in writing. If any significant recommendations are given orally,
then confirmations have been given in writing. You have complied with Rule that relates to
the Code of Ethics of
1. Fairness
2. Diligence
3. Professionalism
4. Compliance

Q 4.Ragini wants to donate to the National sports fund some amount out of the Rs. 1 crore
which she is likely to get as award. Tarun wants to know if any benefit is available to Ragini
under the Income Tax Act on account of this donation.
1. The whole amount received shall be taxable and there shall be no tax benefit on such
donation.
2. The amount received will be taxable but the part donated will be tax free under section
80-G.
3. The donated amount can be off-set against her earnings from endorsements.
4. No benefit will be available as her taxable income is above Rs. 10 lakh.

Q 5.While interacting with you, Sahil came to know about your investing style, viz. Direct
Equity investment and some schemes of mutual funds. He wants to know whether you can
manage some of his money in your investments and assign him appropriate share in the
profits thereof. As per FPSB code of Ethics is it possible for you ?
1. Yes,
2. Yes, but with prior permission from FPSB against a written proposal letter from sahil
3. Yes, but with a proper written agreement in which all terms and conditions must be
stipulated in advance
4. No
Q 6.As per the practice guidelines of FPSB India followed by you, being a CERTIFIED
FINANCIAL PLANNERCM practitioner, which amongst the following is the next step after
defining and discussing with Urvashi the basic terms of the financial plan construction ?
1. To collect the general quantitative information of the prospective client
2. To inform the prospective client about the terms of the engagement
3. To define the financial goal of Urvashi
4. To share past financial records of your existing clients with your prospective client in
order to make him comfortable with number and success of your clientele funds

Q 7.Amarnath wants to buy a Bungalow in Dubai. As per current RBI provisions, how much
investment can Amarnath make directly in Dubai in his individual capacity for buying the
Bungalow.
1. There is no upper ceiling for the same. He can do as much investment as he wants
2. Maximum US$ 2,50,000 per financial year
3. Maximum US$ 1,00,000 per financial year
4. Maximum US$ 50,000 per financial year

Q 8.Amarnath believes in charity. Towards this, he wants to donate 5% of his gross total
income to a Trust providing full time education to orphan children. Amarnath wants to do
this charity in a tax efficient manner. However the specific trust he has identified is not a
recognized institution for the purpose of section 80G of the Income Tax Act. According to
you in what manner Amarnath can do this charity in a tax efficient way ?.
1. He can donate 5% portion of his all properties to that Trust.
2. He can give 5% of his gross total income to Trust and claim his amount as his personal
expenditure from his business income.
3. He can create a non-revocable charge of 5% of his total income upon his all business
properties/incomes by executing a legal document in favour of that Trust.
4. All of the above

Q 9.You advise Arvind to buy a Rs. 50 Lakh life insurance term plan. While filling the
proposal form for purchase of this term plan Arvind does not mention details of another Life
Insurance policy, taken by him earlier, from a different insurance company. Incase of any
mishap, under which principle the claim of Arvind could be questioned by the present
Insurer, if facts of his earlier insurance policy become known ?
1. Principle of Insurable Interest
2. Principle of Utmost Good Faith
3. Principle of Waiver and Estoppel
4. Principle of Indemnity

Q 10. Sunanda wants to know that if at any point of time they are required to withdraw
some amount prematurely from Aakash and Sanjana`s PO RD account, How much is allowed
to withdraw and after how many years ?
1. No premature withdrawal is allowed.
2. One withdrawal upto 25% of the balance allowed after 2 years.
3. One withdrawal upto 50% of the balance allowed after 1 year.
4. One withdrawal upto 50% of the balance allowed after 2 year.

Q 11.The fatal car accident in which Ms. Claira lost her husband, the driver of the car
sustained severe injuries but has recovered now without any permanent disability. Who is
liable to pay compensation towards the driver`s medical expenses and loss of earnings ?
1. The insurance company insuring the vehicle involved in the accident with Mr. Claira car, is
liable to pay the compensation provided the vehicle is insured for third party claims.
2. None. The driver being the risk carrier should have insured himself against such an
eventuality.
3. If the driver approaches Motor Accident Claims Tribunal, the compensation as awarded
will be payable from Ms. Claira`s own pocket.
4. Mr. Claira’s car insurance company shall pay such compensation, the policy purchased
being a comprehensive one covering additional liabilities.

Q 12.Ms. Claira asks what tax shall be applicable if she, at any time decides to sell the gold
bars. As per you, the same is ___________
1. Long term capital gain tax at a basic rate of 20% shall be applicable with indexation
benefit
2. The sale proceeds will be added to Ms. Claira’s income and tax shall be payable at the
maximum marginal rate applicable in her case.
3. A long term capital gain tax at a flat rate of 10% shall be applicable.
4. She will be required to pay wealth tax @20% flat rate

Q 13.You have started working on the financial plan for Dr. Mishra. One day he called you &
told that for Estate Planning aspects of his financial plan he shall be taking the series of his
brother, an advocate. As per FPSB code of Ethics how would you proceed in this aspect ?
1. This is not possible as the financial plan has to cover all aspects.
2. This must be stipulated in writing.
3. Prior consent of Dr. Mishra’s wife must be taken.
4. Prior consent from his brother must be taken.

Q 14. Recently one of leading AMC has introduced a new FMP of 20 months indicating an
annual yield of 12.50%. This AMC is sponsored by a leading Pvt. Bank. The bank is offering
an interest rate of 11% p.a. on FDR of 24 months. Dr. Mishra is looking for short term
parking of the entire cash received from his father in law. From “Default risk” point of view
which of the two investment is more secure.
1. Bank FDR
2. FMP
3. Both have the same risk
4. Up to 1 lac bank FDR is more secure, above that both have same risk

Q 15.In March 2008, Dr. Mishra suffered a cash loss of Rs. 1.5 Lac in gold derivative
transaction which was settled by him without giving delivery. He has not filled income tax
return for AY 2018-19 as yet and wants to know the tax treatment on this loss. According to
you this loss_________
1. May be set off against his salary income for AY2018-19
2. May be carried forward to next year and may be set off against any speculative income in
the next year
3. Can neither be set off against salary income nor can it be carried forward
4. Could be set off against any speculative income in the same assessment year’s income
only.

Q 16.While interacting with you during the data collection sessions, Gunjan and Neerja
become so impressed with your professional approach and the trust created that the couple
requested you to become a whole time legal guardian of their kids regarding execution of all
required financial steps at every stage in future even without further recourse to the couple.
As per FPSB Code of Ethics, is this possible for you ?
1. Yes
2. Yes, but you can do it in your individual capacity and not in professional capacity.
3. Yes, but in that case you will not be in a position to charge any professional fee from the
couple.
4. No

Q 17.Gunjan’s housing loan was granted on “Equitable Mortagage” basis. In view of the
current credit crisis hovering over major world economies, Gunjan’s lender wants to convert
this loan on the lines of “English Mortgage” clause. Gunjan wants to know if he accepts this
option, what major change will occur in the terms and conditions governing his housing
loan? According to you, if he accepts the new clause he will have to_______.
1. deposit the title deed of the property with the lender right now
2. sell his property to the lender right now on the condition that if at any time Gunjan fails
to repay the outstanding loan, the sale shall be absolute, otherwise it will be void
3. transfer the possession to the lender right now with a condition of re-transfer on
repayment of the entire loan amount
4. All of the above

Q 18.Which of the following shall you avoid while providing Financial Planning services to
Urvashi in line with the Ethical and Professional Conduct required of CFP professionals by
FPSB India ?
1. Alter existing financial strategy promptly in the interest of Urvashi, even without
confirming to her, if the adverse developments materially impact her financial goals.
2. Keep Urvashi fully informed of adverse developments affecting her financial goals and
take remedial action only after her understanding of the situation and her concurrence.
3. Advise Urvashi of the developments affecting her financial goals only when she comes for
review of Financial Plan after the pre-determined period.
4. Revise asset allocation as often as possible to ensure that the financial goals are achieved
exactly as set out initially.

Q 19.Sunil is aware of New Pension scheme launched by Govt. Of India w.e.f. 01-01.2004.
He wants to know whether he can migrate to this scheme from his existing EPS scheme and
if yes whether it is advisable to do so.
1. Yes, he should migrate to the new scheme as he can get the equity markets leverage on
his till date accumulations and new contributions
2. No, he cannot migrate because his existing scheme does not allow migration
3. Yes, because in the new pension scheme he is permitted to choose his pension
contribution according to his comfort.
4. No he cannot migrate as it is applicable only for people joining after 31.03.2004

Q 20.On May 2004, Arka had invested in 10000 shares having face value of Rs.10 per share
which is an unlisted company and a subsidiary of the company for which he is working. The
subsidiary company gave an offer two months ago to buy back such shares at Rs. 93.50 per
share. Arka has accepted the buyback offer and has recently got an amount of Rs. 9.35 Lac.
He seeks your advice on taxability of such sum received. You advise that___________ is
payable as capital gain tax.
1. As the subsidiary company is unlisted, basic rate of 30% plus surcharge and cess if
applicable.
2. A basic income tax rate of 20% plus surcharge and cess if applicable, with the benefit of
indexation or 10% plus surcharge and cess if applicable, without the benefit of indexation
whichever is beneficial to Arka
3. Long term capital gains tax at a basic rate of 20% plus surcharge and cess if applicable
4. A basic income tax rate of 20% plus surcharge and cess if applicable, with the benefit of
indexation.
Q 21. Roger has heard that a CFPCM practitioner is able to take care of the execution of all
aspects of his Financial Plan, viz. Investments, Insurance, Tax Planning, Estate Planning,
Retirement solutions, etc. He confirms with you the same. You advise him that:
1. This is not true about all CFPCM practitioners. The scope and limitation of the services
of a CFPCM practitioner need to be disclosed in writing by him/her in the beginning itself.
2. A CFPCM practitioner can never be believed to take care of all aspects of a Financial Plan.
3. This is the right assumption which can be made about all CFPCM professionals.
4. A CFPCM practitioner can make a financial plan, various aspects of which need to be
executed by experts in their respective fields.

Q 22.Which of the following shall you avoid while providing Financial Planning services to
Arka and Shamli in line with the Ethical and Professional Conduct of CFP Certificant entailed
by FPSB India ?
1. Keep the client information of developments in the field of Financial Planning.
2. Advice the client in those areas in those areas I which you have competence.
3. Seek council of qualified individuals for areas in which you lack adequate competence.
4. Alter existing financial strategy promptly, even without confirming to client if the
change in circumstances materially impacts the clients financial goals

Q 23.Anil has told you that last month one of their marketing managers who was recruited
on 1st July 2008 and was an employee in his firm, died in a road accident while he was on
leave. Now apart from other settlements to him, his family is also demanding a Gratuity
payment from the firm. Anil wants to know whether the firm is liable to pay Gratuity on the
said employee’s service to his family.
1. Firm is liable to pay gratuity to the family of the employee.
2. Firm is not liable to pay any gratuity as his service was for less than 5 years.
3. Firm is not liable to pay any gratuity as at the time of death he was not on official duty.
4. Firm is not liable to pay any gratuity his salary was above Rs. 6500p.m. at the time of
death

Q 24.Before beginning work on Roger’s Financial Plan, you have drafted a document
outlining the “Scope of Engagement” and sought Roger to mutually define and determine
the activities that may be necessary in order to proceed with client engagement. Roger
asked you about relevance of such a document. In the context of Financial Planning
Profession, you explain about the “Letter of Engagement” as a .
1. professional requirement under Practice Guidelines of FPSB India
2. professional requirement under Code of Ethics of FPSB
3. India necessary legal requirement as per Contract Act 1872 document for his personal
record

Q 25.Omprakash’s father Mr.Hariom has taken a loan under reverse mortgage scheme
against his house in Gurgaon which is value today at Rs. 20 lakh. Omprakash is curious to
know, if the loan amount being received by his father will be treated as income and whether
the alienation of property for recovery of loan attracts capital gains ?
1. The amount received by Mr. hariom shall be treated as his income and it will be taxable in
his hands and for the purpose of alienation of property for recovery of loan shall attract
capital gain.
2. The amount received by Mr. Hariom shall not be treated as his income and shall be
exempt from tax and for the purpose of alienation of property for recovery of loan shall not
attract capital gain.
3. The amount received by Mr. Hariom shall not be attract as his income hence shall not
be taxed, for the purpose of alienation of property for recovery of loan shall attract capital
gain.
4. The amount received by Mr. Hariom shall be treated as his income and it will be taxable
in his hands and for the purpose of alienation of property for recovery of loan shall attract
capital gain but only in case of death of the mortgagor.

Q 26.Ravi saw the acronym CFPCM against your name in your business card. He wants to
know about the same. You tell him that
1. CFP marks are owned outside the US by US based FPSB Ltd
2. FPSB lndia is the owner of CFP marks within lndian territory
3. The US based FPSB Ltd. is licensed globally to administer CFP marks
4. The US based FPSB Ltd. and FPSB lndia are respectively licensed to issue CFP certification
in US and lndia

Q 27.You, as a CFPcm certificant, need to disclose regarding compensation to be received

from Rahul. According to you, which would be the most appropriate option ?
1. Need not disclose the source of compensation
2. Need to disclose compensation structure at the time of establishing relationship
3. Need to disclose only when asked by Rahul
4. Need to disclose the source once the financial plan is constructed.

Q 28.You have disclose in writing to Rahul that you are only authorized to sell or advise on a
restricted range of products, and other limitation of your capacity to serve him, this is
according to
1. Objectivity
2. Competence
3. Fairness
4. Integrityhe Rahul that relate to the Code of Ethic of_______

Q 29.lrawati wants to invest in NSC after 6 months in the name of Rishi and Sonali. She
wants to know the taxability of interest accrued and the maturity amount on NSC. (Assume
tax provisions of FY 2009-10 would prevail}
1. Will not be taxed they as they are minors
2. Would be clubbed with lrawati's income in the year in which interest accrues and would
be eligible to deduction under section 80C, the maturity amount would be exempt from tax
3. Would be clubbed with lrawati's income in the year in which interest accrues and would
not be eligible for deduction under section 80C, the maturity amount would be exempt
from tax
4. The children would taxed on interest earned at the time of maturity of NSC

Q 30.You have mentioned to Devnarayan that you shall ensure all information and relevant
documents given to or gathered by you are securely stored to establish at any time that it
has complied with the FPSB India’s professional standards and be available for inspection by
the FPSB India when required. Such records shall be retained for seven years from the date
the document was last acted upon. This is according to the code of Ethics of _______
1. Compliance
2. Professionalism
3. Diligence
4. Objectivity

Q 31.A mutual fund agent has told Devnarayan that bigger the AUM of the fund the better it
is. Which of the following statements are correct? 1) The bigger the fund’s AUM, the lower
expense ratios and in that sense it could be better. 2) The bigger the fund’s AUM, less are
the chances of showing break-out returns as stock buying becomes difficult without moving
the price upwards. 3) The bigger the fund’s AUM the worse-off a mid & small cap fund
would be, due to its limited pool 0f the stock. 4) The smaller the AUM of a small cap fund
the better it is due to lower expenses & higher returns.
1. Only 1 is correct.
2. Only 1&2 are correct.
3. Only 1, 2 & 3 are correct.
4. Only 2, 3 & 4 are correct

Q 32.Before finalizing the Financial Plan, Prabhat tells you that he wants to entrust the
estate issues to a solicitor friend, Mr. Sunil Shrivastav. Which of the following is your best
stand?
1. This is not permissible as per the Rules of FPSB India
2. This is permissible subject to such an arrangement finding an explicit mention in the
Financial Plan for the said activity
3. This is permissible subject to the advice of the solicitor being integrated into the financial
plan and monitored along with the plan
4. You may enter into and MOU with the solicitor and may also have a revenue sharing
model

Q 33.While preparing oral and written recommendations, a member of FPSB and India
shall______ _
. Conduct or have access to research on financial strategies and products that may be
appropriate to achieve the client’s identified needs and objective.
2. Develop a suitable financial strategy or plan for the client based on the relevant
information collected and analyzed.
3. Take reasonable steps to place the client in a position to comprehend the
recommendations and the basis thereof.
4. Build with in the recommendation suitable ‘stop loss’ situation to avoid losses of high
magnitude.

Q 34.An analyst has advised Dharampal after considering him to be risk averse, to invest in a
port folio to optimize or maximize expected return based on a given level of market risk is
an inherent part of higher reward. He was referring to__________.
1. Sharp ratio.
2. Post-modern portfolio theory.
3. Jensen’s ratio
4. Modern portfolio theory.

Q 35.Avinash wants to know, what would happened to the no claim bonus on his car
insurance after he sells his car.
1. He can enjoy the no claim bonus on their premium for his new car if he buys it within a
specified period from the date of sale of his old car.
2. No claim bonus is lost after sale of old car.
3. He can enjoy only 50% benefit of the no claim bonus on the premium for his new car if he
buys it within a specified period from the date of sale of his old car.
4. He can avail benefit of no claim bonus on premium paid for insurance taken tor other
purposes from same insurer.

Q 36.Which of the following would not be violation of the “principle of integrity” in the
performance of your professional service to Dr. Vijay ?
1. Exercising reasonable and prudent judgment in dealing with Dr.Vijay.
2. Making misleading claims about the scope and areas of your competence.
3. Giving the impression that you are presenting the views of FPSB India.
4. Engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.

Q 37.You as a CFPcm Practitioner use the CFP cm Mark as a proclamation to the public that
you: (a) Can be trusted with client’s financial affairs with confidence. (b) Will competently
fulfil the responsibilities owed to the client. (c) Are governed by a professional code of
ethics. (d) Possess exhaustive knowledge of all financial matters.
1. (a) , (b).
2. (a), (b), (c).
3. (a), (c), (d).
4. All of the above.

Q 38.Kartik wants to know how you will ensure that information and relevant documents
given to or gathered by you are securely stored? This would be is according to FPBS India’s
rule that relate to the code of Ethics of_________.
1. Integrity
2. Diligence
3. Compliance
4. Professionalism

Q 39.The investment done in the PO MIS of sourabh and Anmol was from the savings of
meeta. This account was opened on 1st April 2009-10. Are applicable to day ?
. Interest income shall be taxable in the hands of Meeta.
2. Interest income shall be taxable in the hands of Vinod.
3. Interest income shall be taxable in the hands of sourabh and anmol.
4. Data insufficient to ascertain the taxability of the interest.

Q 40.An investment analyst has told vinod to invest in a portfolio after evaluating on the
following parameters- (1) The performance portfolio adjusted by the return of risk free
assets over the risk of portfolio. (2) Measure of the volatility in a portfolio as compared to
the entire market (index) as a whole (3) Measure of a how many individual elements tend to
deviate from the average. (4) Measure excess return on an investment over the benchmark
with same degree of risk (5) The proportion of variability in a portfolio compare to
benchmark. The analyst also used a lot of terminology which confused vinod. He wants to
know how the terminology used fits into these evaluation parameters. You advise the
terminology, respectively, as –
1. Beta, sharp ratio, standard deviation, alpha, R-squared.
2. Sharpe ratio, beta, standard deviation, Alpha, R-squared.
3. Alpha, R-squared, standard deviation, sharp ratio, beta.
4. R-squared, sharp ratio, standard deviation, alpha, beta.

Q 41.You have advised vinod to purchase a Rs. 50 lakh life insurance term plan. Vinod wants
to know whether it is necessary to mention the details of his other life insurance policy
purchased from different insurance companies. In case he fail to mention the same in the
proposal form and subsequently dies due to an accident, under which principle his claimed
could be question by the insurer, in facts of the other existing insurance policy become
known to the insurance company at the time of claim settlement.
1. Principle of insurable interest.
2. Principle of utmost good faith.
3. Principle of waiver and Estoppel.
4. Principle of indemnity.
Q 42.Vikrant wants to make a will and understand its procedure; you explained that the
________is the person responsible for offering the will for probate.
1. Testator.
2. Executor.
3. Lawyer.
4. Beneficiary.

Q 43.Vikrant wants to purchase a child plan from a life insurance company to meet
Himanshu’s educational needs. He want to know, if he get permanent physical disable due
to accident which would hamper his income pursuits, by what means can the policy be kept
in force without payment of future premium but retaining intended benefits. You
advise_________.
1. Payor rider
2. Dreaded disease rider
3. Living benefit rider
4. Survivor purchase option ride

Q 44.While preparing a financial plan for vikrant you have made a forecast of his present
revenues and expenditures i.e. constructed a model of how his finances might perform in
the near future. You
have prepared a________.
1. Investment plan.
2. Fund flow statement
3. Cash flow statement
4. Budget

Q 45.In the initial stage of financial plan preparation, you told ravindra and also mention in
the engagement letter that you would charge fixed fee for the financial plan construction
and you would also earn commission on sale of recommended financial products, if the
same is accepted. Which code of ethics binds the CPFcm practioner to disclose of interests?
1. Objectivity.
2. Fairness.
3. Integrity.
4. Professionalism

Q 46.Ravinder’s father has made a will deed for distribution of his assets. Ravindra discusses
with you regarding probate process, as per you which is not a feature of probate process?
1. The assets are gathered, applied to pay debts, taxes expenses of administration and
distribute to those designated as beneficiaries in the will.
2. Executor or personal representative named in the will is in charge of this process.
3. All legal heirs will receive notices from the court to fie objections.
4. The court will give orders to distribute the assets to the heirs as per intestate succession
Act.

Q 47.You have disclosed in writing to thirukutti on your ability to advise and sell on a
restricted range of products, and some other imitation of their capacity to serve him.
Complied with the code of ethics of_________.
1. Integrity
2. Objectivity
3. Fairness
4. Diligence
Q 48.You have already mention to thirukutti that you shall you confirm in writing to him
where a subsequent instruction given by him significantly alters the financial strategy or
balance of an existing portfolio under your supervision. You have a complied with the code
of ethics of____.
1. Diligence
2. Compliance
3. Confidentiality
4. Objectivity

Q 49.Which of the following usages of the certification mark owned (outside the u.s.) by
FPSB ltd. Are correct? 1. CFP qualification 2. CFP certification 3. CFP education 4. CFP
professional 5. CFP practitioner
1. 1, 3 and 4
2. 1, 2 and 5
3. 2, 4 and 5
4. 1, 3 and 5

Q 50.
While preparing financial plan for anjuman you have insured that all the significant
recommendations are made in writing. If any significant recommendations are give orally,
then confirmations have been given in writing. You have complied with rule to the code of
ethics of
1. Fairness
2. Diligence
3. Professionalism
4. Compliance

Q 51.What would be the correct sequence to perform six steps of financial planning process
to prepare a financial plan for Dr. Darshan? 1. Developing a presenting the financial plan 2.
Analyzing and evaluating the client’s financial status. 3. Implementing the financial plan 4.
Monitoring the financial plan 5. Establishing client-planner relationships. 6. Gather client
data and determining goals and expectations.
1. 1, 3, 4, 5, 2, 6
2. 6, 2, 5, 4, 3, 1
3. 6, 5, 2, 1, 3, 4
4. 5, 6, 2, 1, 3, 4

Q 52.In the initial stage of financial plan preparation, you told Dr. Darshan and also mention
in the financial plan prepared that you would charge fixed fee for the financial plan
construction and you would also earn commission on sale of recommended financial
products, if the same is accepted. Which code of ethics binds the CFP cm practitioner to
disclose conflict of interests ?
1. Objectivity
2. Fairness
3. Integrity
4. Professionalism

Q 53.Kunal has informed you that his Post Office MIS account is maturing next month. He
wants to know whether this account can be extended further and, if so, for what duration?
1. Cannot be extended.
2. Can be extended for 24 months.
3. Can be extended for 60 months.
4. Can be extended for 72 months

Q 54.Irawati wants to know the importance of waiver of premium rider? You tell her that
1. It is useless as there will not be any amount to be received from the Insurance Company
at the time of maturity of the policy.
2. It is very useful as all future premiums would be waived by the Insurance Company in
case the Life Assured becomes totally and permanently disabled.
3. It is same as Permanent Disablement rider hence need not be mentioned separately.
4. It is inbuilt with all the Term Insurance Plans and thus need not be mentioned separately

Q 55.A CFPCM practitioner has to necessarily do a fee based financial planning. Which of the
above are correct?
1. (ii) and (v) only
2. (i), (ii) and (iv) only
3. (i) and (ii) only
4. (i) and (iv) only

Q 56.Irawati wants to create a private trust in the name of her children. According to you,
which of the following are true in case of a private trust. i) A trustee shall be any known
person capable of holding property. ii) A trust has to be declared by a non-testamentary
instrument in writing, signed and registered or by the will of the author of the trust or of the
trustee in case of an immovable property. iii) A trustee would be taxed in his hands in a
representative capacity where the beneficiary is a minor, lunatic or idiot or specifically
entitled to receive the income from the trust. iv) The author of the trust can be the trustee
himself.
1. (iii) and (iv)
2. (ii) and (iii)
3. (ii), (iii) and (iv)
4. (i), (ii) and (iv)

Q 57.Irawati wants to invest in NSC after 6 months in the name of Rishi and Sonali. She
wants to know the taxability of interest accrued and the maturity amount on NSC. (Assume
tax provisions of FY 2009-10 would prevail)
1. Will not be taxed as they are minors.
2. Would be clubbed with Irawati’s income in the year in which interest accrues and would
be eligible to deduction under 80C, the maturity amount would be exempt from tax.
3. Would be clubbed with Irawati’s income in the year in which interest accrues and
would not be eligible to deduction under 80C, the maturity amount would be exempt
from tax.
4. The children would be taxed on interest earned at the time of maturity of the NSC.

Q 58.Ravi wants to invest Rs. 2 lakh in 390 days Bank Fixed deposit yielding 9% pa, which
also attracts tax on such interest @ 30%. From Tax Planning Perspective, you advise him to
invest a fixed sum into the ‘Growth’ option of a Fixed Maturity plan (FMP) of a Mutual Fund,
more than one year term, and expected to yield same pre-tax returns as the Bank Fixed
Deposit. Ravi wants to know the tax advantage to him, if investment is done in the FMP of
Mutual Fund vis-à-vis the Bank Fixed Deposit. (Please ignore cess and assume Income tax
provisions of AY 2017-18 are applicable)
1. Tax advantage to the extent of 20.00% is possible on income/gains.
2. Tax advantage to the extent of 10.00% is possible on income/gains.
3. Tax advantage to the extent of 12.50% is possible on income/gains.
4. There is no apparent Tax advantage in FMP vis-à-vis the Bank Fixed Deposit.
Q 59.Ravi saw the acronym CFPCM against your name in your business card. He wants to
know about the same. You tell him that :
1. CFP marks are owned outside the US by US based FPSB Ltd
2. FPSB India is the owner of CFP marks within the Indian territory
3. The US based FPSB Ltd. Is licensed globally to administer CFP marks
4. The US Based FPSB Ltd and FPSB India are respectivelylicensed to issue CFP certification in
US and India

Q 60.You have suggested an investment strategy which aims to invest more when the share
price or NAV falls and less when the share price or NAV rises. It is done by achieving the
total targeted value of the investment by making appropriated amounts at each
predetermined interval. You are indicating a technique known as :
1. Value averaging
2. Rupee Cost averaging
3. Economic Cost averaging
4. Weighted averaging

Q 61.Roger has received few gifts in the financial year 20017-18 and he wants to know
about the taxation of the same. He received a cash gift of Rs. 50,000 on 1st November, 2017
from a friend and another gift of jewellery from his neighbour on 8th November, 2017
which the neighbor bought earlier for Rs. 24,000 whereas the fair market value was Rs.
27,000. He wants to know, what is the total taxable amount from the above receipts on
which Roger will have to pay tax.
1. The whole amount of Rs. 77,000, as the aggregate value of gifts as money or any
property received from one person or more than one person exceeds Rs. 50,000
2. Nothing is taxable as the aggregate value of money does not exceed Rs. 50,000
3. Rs. 24,000 as the amount received over the limit of Rs. 50,000 is taxable
4. Rs. 27,000 as the total amount in excess of the limit of Rs. 50,000 is taxable

Q 62.Which of the following shall you avoid while providing Financial Planning Services to
Urvashi in 1. Alter existing financial strategy promptly in the interest of Urvashi, even
without confirming to her, if the adverse developments materially impact her financial
goals.
2. Keep Urvashi fully informed of adverse developments affecting her financial goals and
take remedial action only after her understanding of the situation and her concurrence.
3. Advise Urvashi of the developments affecting her financial goals only when she comes for
review of Financial Plan after the pre-determined period.
4. Revise asset allocation as often as possible to ensure that the financial goals are achieved
exactly as set out initially.line with the Ethical and Professional Conduct required of CFPCM
professional by FPSB India?

Q 63.You have advised Urvashi to do Estate Planning. According to you what should be the
most preferred way for her Estate Planning?
1. She should prepare a Will naming her children as the sole beneficiaries as well as
designate one or more guardians with their prior consent.
2. She should devolve all of her personal properties to her personal HUF
3. She should prepare a will naming her children as the sole beneficiaries in the same.
4. She should transfer all of her existing properties in the names of her children and
nominate her both children equally in all her legal documents.

Q 64.One of Urvashi’s friends booked a flat in a building on 1st March, 2009 the
construction of which is yet to finish. Her friend availed of a loan from a housing finance
company and paid interest on part of the loan disbursed during 2009-2010. She wants to
know how much of the interest paid would be eligible for deduction u/s 24 of IT Act for the
AY 2010-11.
1. Nil
2. 20% of the interest payable will be eligible for AY 2010-11
3. Interest payable up to a maximum of Rs. 1.50 lakh can be claimed as deduction.
4. As the EMI has not begun, the whole of the interest paid will be eligible for deduction

Q 65.During the financial discussions with Rahul, you asked him about his income. But Rahul
was bit of hesitant in telling his income details to you. Rahul wants to know the relevance of
income in analyzing his insurance requirement. You explained him that his income would be
used to determine: I. The amount of income protection cover required II. The amount of
premium loading and/or any exclusion applicable to the policy III. What level of income
would be required for dependants in the event of premature death? IV. What level of
income would be required in the e 1. I and II
2. I and IV
3. I,III and IV
4. I,II and IVvent of disability?

Q 66.You as a CFPCM certificant have made it clear to Rahul that you shall enter into an
engagement with him as a client only after securing sufficient information to be satisfied
that: a) The relationship is warranted by Rahul's needs and objectives; and b) You have the
ability to either provide requisite competent services or to involve other professionals who
can provide such services. You have followed the Code of Ethic of
1. Diligence
2. Professionalism
3. Compliance
4. Fairness

Q 67.Prabhat has come to know about this CFPCM practitioner through a newspaper
advertisement. The theme and wording of advertisement says that along with preparation
of Financial Plan, they also help to generate assured return of 12% p.a. According to FPSB
India's code of ethics, the practitioner has violated
1. Code of Ethic of Objectivity
2. Code of Ethic of Professionalism
3. Code of Ethic of Fairness
4. Code of Ethic of Integrity

Q 68.Before beginning work on Kartik's Financial Plan, you have drafted a "Letter of
Engagement" and sought Kartik's consent on the same. Kartik asked you about relevance of
such a letter. In the context of Financial Planning Profession, you explain about the "Letter
of Engagement" as a
1. professional requirement under Code of Ethics of FPSB India
2. professional requirement under Practice Guidelines of FPSB India
3. legal contract as per Contract Act 1872
4. document for his personal record
Q 69.Kartik wants to know whether he is eligible to withdraw from his Employees' Provident
Fund for purchase of a bigger house.
1. Yes, as he has been a member of the fund for more than 3 years
2. No, as he has not been a member of the fund for more than 10 years
3. Yes, as he has been a member of the fund for more than 5 years, and provided he
purchases the house in his own name or jointly with his wife
4. Yes, as he has been a member of the fund for more than 5 years, and provided he
purchases the house in his own name or in his wife's name

Q 70.Kartik wants to invest in ULIP, but he wants to be cautious before entering a long
period of contract. As Per IRDA ULIP Guidelines, if he wants to return the policy within 15
days free look period what amount would be refunded to him?
1. He shall be refunded the fund value subject to deduction of expenses towards medical
examination, stamp duty and proportionate risk premium for the period of cover.
2. Full Premium paid is returned back to him.
3. Premium paid less commission paid to intermediary is refunded to him.
4. He shall be refunded the fund value.

Q 71.Kartik wants to know how you will ensure that information and relevant documents
given to or gathered by you are securely stored? This would be is accordance to FPSB India's
Rules that relate to the Code of Ethics of .
1. Integrity
2. Diligence
3. Compliance
4. Professionalism
Q 72.While preparing a Financial Plan for Vikrant you have made a forecast of his present
revenues and expenditures i.e. constructed a model of how his finances might perform in
the near future. You have prepared a
1. Investment Plan
2. Fund Flow statement
3. Cash Flow statement
4. Budget

Q 73.While explaining the basics of selecting a Mutual Fund scheme you have asked Vikrant
to analyse the Mutual Fund Portfolio by five main indicators that apply, one of these is
which is a measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole.
1. R-Squared
2. Alpha
3. Beta
4. Sharpe Ratio

Q 74.Prior to providing any Financial Planning services, you a Financial Planning practitioner
and Vikrant, as your client shall mutually define the scope of the engagement. The letter of
engagement would define the scope of engagement by discussing i. Identification of the
service(s) to be provided ii. Financial Planning practitioner's compensation arrangement(s)
iii. Analysis and evaluation of client's current situation iv. Determining the clients and the
Financial Planning practitioner's responsibilities; v. Establishing the duration of the
engagement; vi. Determine the strategies to a 1. i), ii), iv) and v)
2. iii), iv) and vi)
3. i), ii), iii), iv) and v)
4. i), ii), v) and vi)chieve financial goals
Q 75.Ravinder has informed you that he has not filed his Income Tax return for the AY 2009-
10 within due date. He wants to know from you till which date he can furnish his belated
return.
1. 31st March 2009 or before the completion of his assessment whichever is earlier.
2. 1st March 2010 or before the completion of his assessment whichever is earlier.
3. 31st March 2011 or before the completion of his assessment whichever is earlier.
4. d) No time limit defined.

Q 76.In the initial stage of Financial Plan preparation, you told Ravinder and also mentioned
in the Engagement Letter that you would charge fixed fee for the Financial Plan construction
and you would also earn commission on sale of recommended financial products, if the
same is accepted. Which code of ethics binds the CFPCM Practitioner to disclose conflict of
interests?
1. Objectivity
2. Fairness
3. Integrity
4. Professionalism

Q 77.Ravinder wants to buy a life insurance policy on the life of his father as well as both his
brothers. However, in case of any eventuality he wants to reserve all legal rights of receiving
the policy benefits in his name. He wants to know whether it is legally possible for him.
1. Yes, he can buy the policy in the desired way.
2. Yes, but he cannot reserve the right to receive the policy benefits.
3. No, in the absence of insurable interest he cannot buy life insurance policy in their
name.
4. He can buy the policy only in the name of his father in the desired way

Q 78.Ravinder’s father has made a Will deed for distribution of his assets. Ravinder
discusses with you regarding Probate process, as per you which is not a feature of Probate
process?
1. The assets are gathered, applied to pay debts, taxes and expenses of administration and
distribute to those designated as beneficiaries in the Will.
2. Executor or Personal Representative named in the Will is in charge of this process.
3. All legal heirs will receive notices from the court to file objections.
4. The court will give orders to distribute the assets to the heirs as per intestate succession
Act.

Q 79.Thirukutti wants to know, what are the factors that are included in the calculation of
life insurance premium rate? 1. Rate of Mortality 2. Investment earnings 3. Expenses 4.
Economic condition of the country 5. Political stability
1. 1, 2, 3, and 4
2. 1, 2 and 3
3. 1 and 2
4. 1, 2, 3, 4 and 5

Q 80.Which of the following usages of the certification mark owned (outside the U.S.) by
FPSB Ltd. are correct? 1. CFP Qualification 2. CFP Certification 3. CFP Education 4. CFP
Professional. 5. CFP Practitioner
1. 1, 3 and 4
2. 1, 2 and 5
3. 2, 4 and 5
4. 1, 3 and 5
Q 81.Thirukutti wants to know that in case he dies intestate, who among his following
relatives would not get preference while his property is being devolved.
1. Naireeta (Mother)
2. Murugan Sami (Sister)
3. Vaijanthi (Daughter)
4. Rukmani (Wife)

Q 82.Anjuman is seriously considering surrendering his policy of Unit Linked Pension Plan.
What would be the tax implications of the surrender value received by him?
1. Any amount received will be tax free
2. Amount received less the total premiums paid will be taxable at 10%
3. Any Amount received will be added to his income and will be taxed accordingly
4. Amount received less the index value of the premiums paid will be taxable at 20%

Q 83.What would be the correct sequence to perform six steps of Financial Planning process
to prepare a Financial Plan for Dr. Darshan? 1. Developing and Presenting the Financial plan
2. Analyzing and evaluating the client's financial status 3. Implementing the Financial Plan 4.
Monitoring the Financial Plan 5. Establishing Client-Planner Relationships 6. Gather client
data and determining Goals and Expectations
1. 1, 3, 4, 5, 2,6
2. 6, 2, 5, 4, 3, 1
3. 6, 5, 2, 1, 3, 4
4. 5, 6, 2, 1, 3, 4

Q 84.Kunal wants to invest in a new ULIP, but he wants to be cautious before entering a
long period of contract. As Per IRDA (ULIP) Guidelines, if he wants to return the policy within
15 days free look period what amount would be refunded to him?
1. He shall be refunded the fund value subject to deduction of expenses towards medical
examination, stamp duty and proportionate risk premium for the period of cover.
2. Full Premium paid is returned back to him.
3. Premium paid less commission paid to intermediary is refunded to him.
4. He shall be refunded the fund value

Q 85.While entering into a relationship with you, Kunal assumed that you being a CERTIFIED
FINANCIAL PLANNERCM practitioner, you are fully able to take care of the execution of all
aspects of his Financial Plan, i.e. Taxation, Insurance, Investments, etc. As per FPSB India
Code of Ethics, what is the best proposition in this context?
1. This is the right assumption which can be made about all CERTIFIED FINANCIAL
PLANNERCM professionals.
2. The scope and limitations of the services of the CERTIFIED FINANCIAL PLANNERCM
practitioner needs to be disclosed in the beginning, specifically in writing, by the
professional to the client.
3. A CERTIFIED FINANCIAL PLANNER practitioner can never take care of all aspects of a
Financial Plan.
4. A CERTIFIED FINANCIAL PLANNERCM practitioner is concerned with only making a
Financial Plan and not its execution.

Q 86.Recently in an unfortunate event, one of Kunal's brothers died in a road accident at the
age of 32. He was a bachelor and he died intestate. Kunal's parents were living with his
deceased brother. Apart from Kunal there are three other siblings of the deceased. Kunal
wants to know the applicable order of priority as per Hindu Succession Act for the
disposition of his deceased brother's property.
1. Both parents will get the priority over all siblings of Kunal, including Kunal himself.
2. All siblings of Kunal will get the priority over their parents.
3. Kunal's mother will get priority over her husband and sons.
4. All of them will have equal right over the property of the deceased.

Q 87.Ram believes that a CERTlFlEDFlNANClALPLANNERCM practitioner is able to take care

of the execution of all aspects of her Financial Plan, i.e. Taxation, lnsurance, lnvestments,
etc. As per FPSB lndia Code of Ethics, what is the best proposition in this context?
1. This is the right assumption which can be made about all CERTlFlED Financial
professionals.
2. The scope and limitations of the services of the CERTlFlED FlNANClAL PLANNERCM
practitioner needs to be disclosed in the beginning, specifically in writing, by the
practitioner to the client.
3. A CERTlFlED FlNANClAL PLANNER practitioner can never take care of all aspects of a
Financial Plan.
4. A CERTlFlED FlNANClAL PLANNERCM practitioner is concerned with only making a
Financial Plan and not its execution.

Q 88.lrawati told you that her ex-husband had purchased a life insurance policy under the
MWP Act, 1874 prior to their divorce. The beneficiaries of the policy are lrawati and their
two children. lrawati wants to know the significance and the benefits of this policy. 1. No
alterations can be made by the husband once the policy is commenced 2. The proceeds of
such a policy cannot be claimed by the husband or his creditors or form part of the
husband's estate 3. Alterations can be made by the wife once the policy is effected 4. The
life assured is the wife
1. 1, 2, 4
2. 1, 2
3. 2
4. 1, 4

Q 89.lrawati wants to know the importance of waiver of premium rider? You tell her that lt
is useless as there will not be any amount to be received from the lnsurance Company at the
time of maturity of the policy
1. lt is very useful as all future premiums would be waived by the lnsurance Company in
case the LifeAssured becomes totally and permanently disabled
2. lt is same as Permanent Disablement rider hence need not be mentioned separately
3. lt is inbuilt with all the Term lnsurance plans and thus need not be mentioned separately
4.

Q 90.lrawati wants to create a private trust in the name of her children. According to you,
which of the following are true in case of a private trust I. A trustee shall be any known
person capable of holding property II. A trust has to be declared by a non - testamentary
instrument in writing , signed and registered or by the will of the author of the trust or of
the trustee in case of an immovable property A trustee would be taxed in his hands in a
representative capacity where the beneficiary is a III. minor, lunatic or idiot or specifically
entitled to receive the income from the trust IV. The author of the trust can be the trustee
himself
1. (lll} and (lV}
2. (ll} and (lll}
3. (ll}, (lll} and (lV}
4. (l}, (ll} and (lV}