CRPC EXAM 2 NEWEST ACTUAL EXAM COMPLETE 200 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED + || BRAND NEW!!

1 | P a g e CRPC EXAM 2 NEWEST 2024-2025 ACTUAL EXAM COMPLETE 200 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED + || BRAND NEW!! The process of rebalancing is a key factor in A) strategic asset allocation. B) dynamic asset allocation. C) tactical asset allocation. D) institutional asset allocation. - ANSWER- A) strategic asset allocation. Strategic asset allocation involves obtaining the best asset mix for a client over a long period. For example, this might be 60% stocks and 40% bonds. When these percentages change due to market movements, this strategic asset allocation requires the portfolio to be rebalanced back to the target mix, in this case 60/40 stocks/bonds. What does Jensen's alpha tell you? A) 2 | P a g e the percentage by which a manager beat the market B) the percentage a manager over- or underperformed based on the amount of risk taken C) the percentage of return that can be attributed to unsystematic risk D) the percentage of return that can be attributed to systematic risk - ANSWER- B) the percentage a manager over- or underperformed based on the amount of risk taken Alpha is the percentage a manager over- or underperformed based on the amount of risk taken. The percentage of return that can be attributed to systematic risk is referred to as the coefficient of determination (R2). Which of the following are not used in technical analysis? A) financial statement ratios B) moving averages C) graphs D) supply and demand of stocks - ANSWER- A) 3 | P a g e financial statement ratios Moving averages, graphs, and statistics regarding the supply and demand of stocks are used by technicians. Financial statement ratios are part of fundamental analysis. When performing bond calculations, which of the following general assumptions should be made unless stated otherwise? A) The coupon payment used in bond calculations is the annual amount. B) On a financial calculator, bonds are calculated in the Begin mode. C) The coupon rate is annualized but paid semiannually for U.S. bonds. D) The face value of the bond is $10,000. - ANSWER- C) The coupon rate is annualized but paid semiannually for U.S. bonds. The face value of the bond should be assumed to be $1,000, not $10,000. The coupon rate is stated on an annual basis but is assumed to be paid semiannually for U.S. bonds and the coupon payment is always made at the end of the period, not the beginning. All bonds, even zero coupon bonds, are compounded semiannually in the End mode. This makes all bond YTM quotes standardized for easy comparison. 4 | P a g e Assume your client has a 5% bond, par value of $1,000, and 15 years to maturity. Comparable bonds are yielding 6%. What is the value of this bond? A) $875 B) $902 C) $1,010 D) $925 - ANSWER- B) $902 If the calculator is set for 1 P/YR, then all factors, other than FV, need to be adjusted for semiannual payments. The keystrokes would be: 1,000 [FV], 25 [PMT], 3 [I/YR], 30 [N], then solve for [PV] = -902. If the calculator is set at 2 P/YR, then [I/YR] is 6 and [N] is entered as 15 [SHIFT] [N]. Which of the following is correct regarding the additional payroll tax for high wage earners that was brought about by the Affordable Care Act? A) The tax is split between the employer and employee. B) The tax is 1.9%.