Course Introduction
Retirement Planning Exam
Practice Tests
Retirement Planning is designed to equip students with the essential concepts, strategies, and tools necessary for effective financial preparation for retirement. The course covers topics such as retirement needs analysis, employer-sponsored and individual retirement plans, Social Security benefits, annuities, tax considerations, and investment options tailored to long-term retirement goals. Students also explore risk management through insurance products, healthcare planning in retirement, and the impact of inflation and longevity. By integrating both theoretical frameworks and practical applications, this course prepares students to develop personalized retirement plans and advise individuals on achieving financial security in their post-employment years.
Recommended Textbook
Financial Planning 2nd Edition by Warren McKeown
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15 Chapters
443 Verified Questions
443 Flashcards
Source URL: https://quizplus.com/study-set/3555
Page 2
Chapter 1: Personal Financial Planning
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70601
Sample Questions
Q1) A financial service is defined by the Corporations Act to be provided in the circumstances where people:
A) give financial advice in relation to financial products
B) give legal advice in relation to financial products
C) make a market in a financial product
D) both a and c
Answer: D
Q2) Items which are regarded as financial products include:
A) a security (e.g. a share in a body corporate or a debenture of a body corporate)
B) health insurance, funeral bonds and reinsurance
C) exempt public sector superannuation schemes within the meaning of the Superannuation Industry (Supervision) Act 1993
D) all of the above
Answer: A
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Chapter 2: Financial Planning Skills
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31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/70600
Sample Questions
Q1) Outline circumstances where the NPV form of investment analysis is preferred to using the IRR method.
Answer: Where there is more than one sign change in the periodic cash flows (inflows and outflows) for an investment proposal the NPV form of investment analysis is preferred to using the IRR. This is because given the nature of the IRR calculation more than one IRR value can be calculated where multiple cash flow sign changes occur. As only a single NPV will be calculated regardless of the presence of multiple cash flow sign changes, this method will be preferred in these circumstances.
Q2) The greater the initial investment the:
A) greater the future value at a given interest rate and given number of periods.
B) lower the future value at a given interest rate and given number of periods.
C) future value will be the same at a given interest rate and given number of periods.
D) none of the above.
Answer: A
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Chapter 3: Taxation Planning
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26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/70599
Sample Questions
Q1) Marginal income tax rates for individuals in Australia are best described as:
A) regressive.
B) progressive.
C) constant.
D) none of the above.
Answer: B
Q2) Which of the following are not tax deductible expenses?
A) Expenses of a domestic nature.
B) Expenses of a capital nature.
C) Expenses incurred in earning exempt income.
D) All of the above.
Answer: D
Q3) The Australian company income tax rate is:
A) 10%
B) 15%
C) 30%
D) none of the above
Answer: C
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Chapter 4: Investment Choices
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29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70598
Sample Questions
Q1) Describe how investor behaviour can challenge the assumption that investors are rational.
Q2) To be _ _% confident that the actual returns will lie in a given range, we simply determine the values of the expected return plus two standard deviations and the expected return minus two standard deviations, assuming the returns are normally distributed.
A) 42
B) 68
C) 95
D) 99
Q3) The enterprising or aggressive investor is characterised by:
A) speculation.
B) their willingness to devote time and care to the selection of sound and attractive investments even though they may not be fully trained experts in the field.
C) the conservation of capital.
D) both a and b
Q4) How does diversification reduce risk?
Q5) Briefly explain the effect of a multiple asset class portfolio as reported by Gibson (2000).
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Chapter 5: Direct Investment Fixed Interest and Shares
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29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70597
Sample Questions
Q1) Who are the primary regulators of the Australian financial system?
Q2) Focusing an investment portfolio with ethical investments:
A) allow investors to integrate personal values and social concerns with their investment objectives.
B) potentially creates adverse diversification issues for the investor increasing their investment risk exposure
C) both a and b
D) is not likely to be constrained by a lack of information available from many companies regarding this issue.
Q3) The capital asset pricing model (CAPM):
A) recognises a positive relationship between risk and return.
B) uses beta as the relevant measure of market risk.
C) requires a value for the risk-free rate.
D) all of the above.
Q4) Outline the primary differences between ordinary and preference shares.
Q5) What characteristics are typically associated with ethical investments?
Q6) Outline the general characteristics of the Securities Market Line (SML).
Q7) Briefly explain how lenders use the cash rate when setting interest rates.
Page 7
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Chapter 6: Direct Investment - Property
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29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70596
Sample Questions
Q1) Outline the taxation advantages of investing in a property trust.
Q2) Tax-deferred distributions from property trusts:
A) are declared by the unitholder recipient as income in the tax return in the year of receipt.
B) are used by the unitholder recipient to decrease the cost base of the investment in the property trust.
C) are used by the unitholder recipient to increase the cost base of the investment in the property trust.
D) are only available to unitholder recipients where they have held their investment in the property trust for at least 12 months.
Q3) Imagine you are having a discussion with a friend about investment in property. Your friend favours a direct form of investment because of the costs involved with a property fund but would like to know the benefits of investing in a property fund. Provide an outline of these benefits.
Q4) Discuss the range of factors that you would consider when considering the purchase of a commercial property.
Q5) Outline six of the positive characteristics that are associated with an investment in the property market.
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Chapter 7: Managed Funds
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70595
Sample Questions
Q1) The indirect cost ratio (ICR):
A) measures management costs not deducted directly from investors' account balances to the average net assets of the fund.
B) measures the average net assets of the fund divided by the management costs deducted directly from investors' account balances.
C) approximates current performance bonuses.
D) all of the above.
Q2) The four main types of listed managed fund structures operating through the ASX are:
A) LICs, LITs, REITs and ETFs.
B) LIRs, LITs, RDITs and ETFs.
C) LICs, LITs, RDITs and ETAs.
D) none of the above.
Q3) The calculation of an absolute return arising from the recent sale of a managed fund requires which of the following information?
A) Purchase price, inflation rate and risk-adjusted sale price.
B) Purchase price and inflation rate.
C) Purchase price and risk-adjusted sale price.
D) Purchase price and actual sale price.
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Page 9
Chapter 8: Leveraged Investments
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70594
Sample Questions
Q1) Given the information in Question 23 in relation to the property purchase by Nick Lanay on 1 July 2012, respond to the following questions:
(a) What is the gearing ratio in relation to the investment property as at;
(i) 1 July 2012,
(ii) 30 June 2013, and
(iii) 30 June 2014?
(b) Assume that the investment property was sold at the market valuations as shown in Question 23 on each of 30 June 2013 and 30 June 2014 respectively. Ignoring the Medicare levy and any tax offsets as well as assuming that any capital gain is taxed in full at marginal tax rates in the 2013 financial year and is subject to the 50% capital gains tax discount in the 2014 financial year:
(i) What would have been Nick's after-tax return on the property following the sale based on the property purchase price for the 2013 and 2014 financial years? Include all financial information from Question 23 in your calculations.
(ii) What would have been Nick's after-tax return on the property following the sale based on the capital initially contributed by Nick for the 2013 and 2014 financial years? Include all financial information from Question 23 in your calculations.
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Page 10
Chapter 9: Risk Management and Insurance
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70593
Sample Questions
Q1) In the event of a claim, an indemnity value house and contents policy will:
A) provide a payout equal to the market value of the loss incurred at the time of the loss. B) include the effects of depreciation in establishing a value for the items subject to the claim.
C) both a and b .
D) replace all items at their current replacement value.
Q2) Term life insurance policies taken out through a superannuation fund where salary sacrifice contributions are arranged to fund the amount of the premium payment via the employer will:
A) be subject to a contributions tax of 15% by the recipient superannuation fund.
B) be tax deductible to the employer as concessional superannuation contributions.
C) be paid out on death tax-free to a dependant.
D) both b and c
Q3) The use of the multiple approach for calculating a lump sum benefit to be taken out pursuant to a life insurance policy has been strongly criticised as being too simplistic in nature. Outline the basis for such criticism.
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Chapter 10: Superannuation
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70592
Sample Questions
Q1) Provide an explanation for the introduction of the choice of fund provisions and their relationship to the more recently introduced Mysuper reforms.
Q2) Unfunded superannuation schemes in Australia:
A) represent a financial liability to the fund employer/sponsor.
B) are typically limited to public sector schemes.
C) both an and b
D) none of the above.
Q3) Briefly explain why the concept of fiduciary responsibilities is so important for trustees of superannuation funds.
Q4) Pursuant to the superannuation choice of fund rules:
A) the employer will nominate a default fund on the standard choice form provided to the employee.
B) the employer will not nominate a default fund on the standard choice form provided to the employee.
C) the employee can change their nominated fund at least once every 12 months. D) both a and c
Q5) Briefly discuss why a superannuation fund member's benefit balance is subject to the preservation rules.
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Chapter 11: Retirement Planning
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70591
Sample Questions
Q1) Mr Jobe Laney has recently invested part of his retirement funds, an amount of $65,000 into a term deposit with the Wakpac Credit Union at an interest rate of 6% with interest compounding annually and all funds returned at maturity. If inflation was forecast to be 3% in year 1 and 4% in year 2, using a method that calculates a real rate of return each year, calculate the real amount (in dollars) that Jobe would have on maturity and the overall real rate of return on the investment.
Q2) Jacinta Bailey, 57 years of age, has $330,000 in superannuation money (tax-free amount of $148,500 with the remainder being a taxable [taxed] amount) that she has taken to an income-stream provider who has offered her a payment of $37,000 annually in arrears for the next 15 years with no residual value at this time. Given that Jacinta is on a 32.5% marginal tax rate, calculate how much tax Jacinta is likely to pay each year on the $37,000 annual income-stream until the time she turns 60 and the amount of tax payable thereafter?
Q3) Conditions of release include where the individual has:
A) died.
B) reached the age of 65.
C) become temporarily incapacitated.
D) both a and b
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Page 13
Chapter 12: Self-Managed Superannuation Funds
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70590
Sample Questions
Q1) When a SMSF undertakes borrowings to acquire an investment the lenders recourse against the SMSF is limited to:
A) the asset subject to the borrowing.
B) any real property held by the SMSF.
C) both a and b
D) 50% of the total fund assets.
Q2) SMSFs:
A) have access to the Superannuation Complaints Tribunal.
B) are protected by a government and industry compensation scheme if they suffer losses through the fraudulent behaviour of trustees.
C) both a and b
D) none of the above.
Q3) Given that commonly many of the operational tasks undertaken by a SMSF are outsourced to various SMSF professionals (such as accountants, investment advisers, solicitors etc.), briefly discuss why do SMSF members remain directly liable (for compliance and potential civil/criminal penalties) for the actions of the fund.
Q4) Why are there likely economies of scale in operating a SMSF?
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Chapter 13: Social Security
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29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70589
Sample Questions
Q1) The rationale underlying the provision of social services is based on:
A) the provision of assistance to alleviate financial hard?ship of the unemployed elderly.
B) philosophical reasons, practical and societal arguments.
C) where a person is greater than age pension age and is permanently incapacitated.
D) the provision of assistance to people of good character and those who have not deserted their spouses.
Q2) In your opinion, why is the government in the process of changing the eligibility age for the age pension for some applicants?
Q3) The loan amount on a reverse mortgage is:
A) not assessed under the assets test if the funds are spent immediately.
B) not assessed under the assets test if the funds are spent within 90 days after withdrawal.
C) assessed under the assets test regardless if the funds are spent.
D) assessed under the assets test for amounts exceeding $40,000 regardless if the funds are spent.
Q4) Outline the extent of the assets test exemption for the family home.
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Page 15
Chapter 14: Estate Planning
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70588
Sample Questions
Q1) A generally accepted rule of law is that where both parties to a marriage die simultaneously and it is of relevance to determine which person died first, it is assumed that:
A) the person with the largest amount of net assets died first.
B) the wife died first.
C) the older person died first.
D) the husband died first.
Q2) What is the importance of testamentary capacity in the process of making a will?
Q3) Shares acquired by the deceased before the introduction of the capital gains tax (CGT) will not be subject to CGT if sold by the:
A) executor or the beneficiary.
B) executor within 6 months of the date of death.
C) beneficiary within 12 months of the date of death.
D) none of the above.
Q4) Outline how the use of a trust can provide useful asset protection for individuals.
Q5) Briefly discuss the circumstances in which a power of attorney can be cancelled.
Q6) What are the general consequences where a person dies intestate?
Q7) Briefly explain the differences between a testamentary trust and an inter vivos trust.
Page 16
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Chapter 15: Development of a Statement of Advice
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70587
Sample Questions
Q1) When implementing agreed-upon recommendations in the SOA, the financial planner:
A) must obtain the signature and consent of the client prior to implementation.
B) must ensure the client fully understands the contents of the SOA and that the implementation of the recommendations are in the clients and planners shared interests.
C) both a and b.
D) is unlikely at this point to indicate clearly the responsibilities of each party or a time line for implementation.
Q2) An SOA must:
A) tailor advice to the needs of the client.
B) incorporate the level of the client's financial literacy in its presentation.
C) assess the complexity of the advice provided.
D) all of the above.
Q3) How can the financial planner/licensee and/or product issuer use the information included in RG 168 Disclosure: Product Disclosure Statements (and other disclosure obligations) to assist in their operations including dealings with clients?
Q4) Discuss the form and extent of remuneration disclosure that applies to financial advisers.
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