Preview Questions Financial Planner | Role Specific Skill

Question 1: What is the most efficient way to handle tax implications in a retirement plan for a high-income earner?

Which action should you take?

Choose only one option

Use tax-free growth vehicles, such as Roth IRAs

Rely on taxable brokerage accounts to minimize taxes

Avoid tax-deferral strategies and focus on liquidity

Maximize contributions to tax-deferred accounts

Question 2: What is the primary benefit of a "charitable remainder trust" (CRT) in estate and tax planning?

Which action should you take?

Choose only one option

It provides income for the donor during their lifetime, with the remainder going to charity

It allows the donor to make unlimited charitable gifts tax-free

It allows the donor to avoid all taxes on capital gains

It reduces the income tax burden by converting taxable income into tax-free income

Question 3: What is a Donor-Advised Fund (DAF), and how does it help in estate planning?

Which action should you take?

Choose only one option

It allows the donor to retain control over assets while reducing estate taxes

It creates a legal mechanism to bypass probate

It ensures direct tax-free transfer to heirs

It enables immediate tax benefits while deferring the decision on charitable recipients

Question 4: What is the impact of the capital gains tax on investment strategies, and how can it be minimized in the BFSI industry?

Which action should you take?

Choose only one option

By reinvesting dividends to avoid capital gains taxes

By selling investments quickly to offset capital gains with tax deductions

By using tax-exempt bonds to replace taxable assets

By holding investments for longer periods to take advantage of lower long-term capital gains rates

Question 5: What is the key difference between a revocable and irrevocable trust in tax planning?

Which action should you take?

Choose only one option

Irrevocable trusts allow modifications

Irrevocable trusts provide tax benefits

Revocable trusts offer creditor protection

Revocable trusts avoid probate

Question 6: What is the primary purpose of setting SMART goals in financial planning?

Which action should you take?

Choose only one option

To prioritize goals based on urgency

To create a long-term investment strategy

To ensure that goals are measurable and achievable

To ensure goals are realistic and specific