Practice questions for Preparing Mid$-$term Exam

Grace and Noah are in the market for a new mortgage broker. They are considering two brokers: Direct

commissions from lenders. What is the compen a$.$ Commission Only; Fee Only

a$.$ Commission Only; Fee Only b$.$ Fee and Commission; Comm c$.$ Fee Only; Commission Only

d$.$ Commission Only; Fee and Commission

e$.$ Both are salaried employees

Emily and Liam are evaluating two investment advisory services, Peak Performance Advisors and

Trustworthy Financial Guidance. Peak Performance provides investment advice for a fixed annual fee,

regardless of the account size, while Trustworthy Financial Guidance charges a percentage of assets under

management $($AUM$)$ as their fee and also receives commissions from selling specific investment

products. Considering the compensation method for Peak Performance Advisors first, how is each firm

compensated?

a$.$ Fee only; Fee and Commission

b$.$ Commission Only; Fee Only

c$.$ Fee and Commission; Fee Only

d$.$ Fee Only; Commission Only

e$.$ Both operate on a commission basis

f$.$ Fixed Fee; AUM Fee plus Commissions

g$.$ AUM Fee; Fixed Fee plus Commissions

h$.$ Fixed Fee plus Commissions; AUM Fee

i$.$ AUM Fee plus Commissions; Fixed Fee

j$.$ Both use a fixed fee model

For certification as a Certified Financial Planner $($CFP$),$ candidates are required to meet which of the

following criteria?

Complete a CFP Board$-$registered education program.

Successfully pass the CFP Certification Examination.

Hold a bachelor's degree from an accredited college or university.

Fulfill the CFP Board's Experience requirement.

Agree to adhere to the CFP Board's Code of Ethics and Standards of Conduct.

Renew certification every two years through continued education.

Submit five letters of recommendation from current CFP professionals.

Pass a comprehensive background check including financial history

a$.1,2,$ and $3$

b$.1,2,4,$ and $5$

c$.1,3,$ and $5$

d$.1,2,3,4,$ and $5$

e$.$ All of the above

f$.1,2,3,4,5,$ and $6$

g$.2,4,5,7,$ and $8$

h$.1,3,6,7,$ and $8$