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FICEP Exam Actual Exam Questions and
Answers | 300 Questions and Correct
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Which cycle describes members who are just surviving and living paycheck to paycheck? ----CORRECT ANSWER-----------Earn/Spend/Earn/Spend Financial counselors who don't use what they know about hemispheric thinking may fall into the trap of: ----CORRECT ANSWER-----------Presenting information to a member in a manner that might not be the best way to communicate Using a hard approach, rather than a soft approach, with members: ----CORRECT ANSWER-----------Communicates in an orderly, specific, and straight-forward way The Johari Window describes four zones. When working with a member, the Hidden Zone represents: ----CORRECT ANSWER-----------Information that is known to the member and not the counselor Which type of counseling should a consumer use when a member is preparing for a large purchase? ----CORRECT ANSWER-----------Preventive What is NOT a vital counselor skill? ----CORRECT ANSWER-----------Asking close- ended questions An example of pacing is when a counselor: ----CORRECT ANSWER-----------Matches the member's energy level What is NOT a step in the change process? ----CORRECT ANSWER-----------Not revising the plan What decision making tool is best to use when considering all forces in favor or against a plan so decision can be made? ----CORRECT ANSWER-----------Force-field analysis
What is the first step of the counseling process? ----CORRECT ANSWER----------- Collect member data It is best to divide a budget into which cycle? ----CORRECT ANSWER-----------Monthly What provides a credit history including debt repayment practices for an individual? ---- CORRECT ANSWER-----------Credit report When discussing a member's budget analysis, build in assumptions and adjustments to make sure the process allows for a... ----CORRECT ANSWER----------- 12 - month cycle What is not a step that will reduce debt? ----CORRECT ANSWER-----------Borrowing money from payday lenders Increasing a monthly payment beyond the minimum required by the credit issuer is known as: ----CORRECT ANSWER-----------Paying more on the principal One advantage of leasing a car is: ----CORRECT ANSWER-----------Locked into a contract When determining if a vehicle is affordable, one should consider the: ----CORRECT ANSWER-----------Purchase price, maintenance costs, insurance costs What type of savings helps one cope when the unthinkable occurs? ----CORRECT ANSWER-----------Emergency A good action plan includes: ----CORRECT ANSWER-----------A list of steps and timeline for the member to complete What is NOT an example of ways members may start saving? ----CORRECT ANSWER- ----------Increasing living expenses with each new raise One way to overcome a member's objection to financial counseling is to: ----CORRECT ANSWER-----------Express confidence in member's ability to address the problem
T/F: There is a federal law that states that wages cannot be garnished for child support payments ----CORRECT ANSWER-----------False When dealing with creditors/collectors, it is important for members to: ----CORRECT ANSWER-----------Be proactive T/F: Once a collection is paid, the negative history is not immediately removed from one's credit report ----CORRECT ANSWER-----------True The amount a cardholder is required to pay each month is the: ----CORRECT ANSWER-----------Minimum payment An advantage of using a credit card is: ----CORRECT ANSWER-----------Peace of mind knowing funds are available T/F: You should accept unsolicited increases to your credit limit to help maximize borrowing power ----CORRECT ANSWER-----------False T/F: If a medical bill is ultimately paid by an insurance company, the CRAs must remove the item from a credit report ----CORRECT ANSWER-----------True T/F: Estate obligations must be paid prior to any inheritance being paid ----CORRECT ANSWER-----------True When counseling members, when is the best time to ask if they have medical debt? ---- CORRECT ANSWER-----------During an initial needs assessment When it comes to address medical debt, counselors need to: ----CORRECT ANSWER-- ---------Coach members on how to handle medical debt A rule of thumb for education funding is known as the: ----CORRECT ANSWER----------- Rule of thirds Student loan refinancing means: ----CORRECT ANSWER-----------Taking out a new loan to pay off existing loans
One needs to consider the lending amount (min and max), income requirements, and cosigner release when: ----CORRECT ANSWER-----------Comparing refinancing companies T/F: Wages cannot be garnished if a federal student loan is in default ----CORRECT ANSWER-----------False T/F: Social security wages may be garnished if a federal student loan is in default ---- CORRECT ANSWER-----------True T/F: Seniors may have student loan debt because they discharged it in their bankruptcy ----CORRECT ANSWER-----------False: Most student loans cannot be discharged in bankruptcy T/F: Cure default is a way in which repossessions can occur ----CORRECT ANSWER--- --------False T/F: Full coverage automobile insurance is a secondary product that can be added to a vehicle loan to help in case an emergency occurs ----CORRECT ANSWER----------- False - Examples of these would be GAP insurance, credit life & disability insurance, or extended warranty T/F: Owning generally builds property equity ----CORRECT ANSWER-----------True T/F: Members who are refinancing debt should be encouraged to use a HELOC ---- CORRECT ANSWER-----------False When a member is experiencing severe financial problems, it is important to: ---- CORRECT ANSWER-----------Determine if the member is judgement proof T/F: Lenders are more willing to work with members in the late stages of foreclosure rather than early in the process ----CORRECT ANSWER-----------False
To make the most of a 401(k) or a 403(b) account, members should avoid: ---- CORRECT ANSWER-----------Taking out a loan against them T/F: Loans are allowed on a Traditional IRA account ----CORRECT ANSWER----------- False T/F: Springing (conditions) POA is best for selling property while one is out of state for awhile. ----CORRECT ANSWER-----------False T/F: The POA's key responsibility is to make decision based on the principal's wishes not their own comfort ----CORRECT ANSWER-----------True T/F: It is necessary to have a plan in place in the event of death or disability if you are the sole owner of a business ----CORRECT ANSWER-----------True What is the first immediate step someone needs to take after a death? ----CORRECT ANSWER-----------Determine if the deceased had a prepaid funeral plan After a death, financial counselors may: ----CORRECT ANSWER-----------Help members make a list of all debts and financial obligations T/F: Financial counselors can handle any situation a member faces because nothing is beyond their scope of practice ----CORRECT ANSWER-----------False Members dealing with addiction, mental illness, or physical abuse have: ----CORRECT ANSWER-----------Immediate needs in which a counselor needs to refer to an outside resource This type of tax charges everyone the same percentage of an item's cost ----CORRECT ANSWER-----------Regressive tax T/F: Single, filing jointly is a tax filing status ----CORRECT ANSWER-----------False T/F: Members will likely not have to update their income tax withholding if they recently separated from a spouse ----CORRECT ANSWER-----------True
By pooling risk, insurers: ----CORRECT ANSWER-----------Limit their exposure when losses occur T/F: Insurance coverage is the best way to evaluate risk ----CORRECT ANSWER--------- --False What is not an insurance decision rule? ----CORRECT ANSWER-----------Add insurance coverage for all assets T/F: Life insurance is necessary for all family members ----CORRECT ANSWER----------
- False Before referring a member to a financial planner for investing advice, be sure the members has a: ----CORRECT ANSWER-----------Sufficient emergency fund What is the Rule of 72? ----CORRECT ANSWER-----------Calculates how many years it will take to double an investment T/F: Financial counselors are not financial planners ----CORRECT ANSWER----------- True T/F: Regular, monthly deposits is a warning sign of addiction ----CORRECT ANSWER--- --------False What is not a way to counsel partners of addicts? ----CORRECT ANSWER-----------Only focusing on the member's finances rather than the addict's T/F: Credit unions do not need to comply with SCRA and MLA ----CORRECT ANSWER-----------False T/F: Advocates for veteran assistance can be found in a variety of organizations ---- CORRECT ANSWER-----------True
When members use tax refunds to pay down debts, which debts should be paid first? --- --CORRECT ANSWER---------Always pay the debts with high interest rates or that could prompt garnishments. Which type of qualified IRA withdrawal is exempt from income tax? -----CORRECT ANSWER---------Roth IRA withdrawals are exempt. Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? --- --CORRECT ANSWER---------Low-income families with earned income qualify for the credit. These six expenses are typically accepted by the IRS as itemized deductions: ----- CORRECT ANSWER---------Traditional IRA contributions, alimony payments, real estate taxes paid, state and local income taxes, mortgage interest, and casualty and theft losses. What is the meaning of the insurance practice "pooling of risks"? -----CORRECT ANSWER---------Combining risks among insurers as well as groups of individuals. How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact employee health benefits? -----CORRECT ANSWER---------It gave employees the right to retain health insurance after their job ends by paying the full premium. Under standard property insurance plans, how much of the cost of replacing property is typically covered? -----CORRECT ANSWER---------80% Which statement best defines comprehensive and collision insurance coverage for vehicles? -----CORRECT ANSWER---------Collision is for accidents and comprehensive is for other forms of damage and theft. What type of protection is provided by an umbrella liability policy? -----CORRECT ANSWER---------It protects homeowners and vehicle owners from lawsuits. Which statement accurately describes features of term insurance and whole life insurance? -----CORRECT ANSWER---------Whole life policies build cash value and policy settlement options.
Why should a member never simply drop a whole life insurance policy? -----CORRECT ANSWER---------Whole life policies usually have cash value, or surrender options. What is the "rule of 72" used to determine? -----CORRECT ANSWER---------The number of years required to double the investment: 72 divided by the current interest rate. What is the rate of return? -----CORRECT ANSWER---------The percentage gain in value on your investment. If you drop your thermostat by one degree, how much will it cut your heating costs? ----- CORRECT ANSWER---------3% In order to make a cost-effective car purchase, what should you consider before buying? -----CORRECT ANSWER---------You should consider the car's cost to buy, cost to maintain, ability to meet your needs, and resale value. What are some potential disadvantages of leasing a car? -----CORRECT ANSWER------ ---Leases sometimes allow dealers to charge additional fees for exceeding the contract's mileage or causing high "wear and tear" on the card. What is an advantage of prepaid cellphone plans? -----CORRECT ANSWER--------- Prepaid pay-as-you-go plans are better for people with low credit ratings. What is the likely outcome of making only the minimum payment on credit cards and other forms of debt? -----CORRECT ANSWER---------It traps the borrower in an endless cycle of debt. What effect did the Great Recession have on Americans' savings habits? ----- CORRECT ANSWER---------On average, they are now saving three percent of the annual income pared to fourteen percent in the 1970s. What are the three levels of the savings pyramid? -----CORRECT ANSWER--------- Periodic savings, safety-net accounts, and retirement or other long-term savings.
Some examples of elder abuse include: -----CORRECT ANSWER---------sexual and emotional abuse; self-neglect and abandonment; financial abuse A Durable Power of Attorney for Health Care is recommended for any individual over the age of.. -----CORRECT ANSWER--------- 18 As a guardian of the person, you would be responsible for.. -----CORRECT ANSWER--- ------housing and living conditions; seeing the individual gets proper medical care Where is the identity theft most likely to occur? -----CORRECT ANSWER---------In your home. When people report identity theft, what is the first step they should take? -----CORRECT ANSWER---------Close all existing accounts and open new ones. What is social engineering? -----CORRECT ANSWER---------It is the use of social situations and social rituals to make people feel comfortable sharing personal information. What are some common clues tellers can look for which indicate a fraud is being committed? -----CORRECT ANSWER---------The member makes a large cash withdrawal, avoids conversation, or seems hostile. If it looks like an elderly member may be the victim of a scam, how can the teller help them? -----CORRECT ANSWER---------The teller can ask the member's permission to call a family member. If you suspect fraud, when should you react? -----CORRECT ANSWER---------React quickly so you can ask more questions, stall the member, or call for help. Which tactic will best help tellers stop a pigeon drop scam or a credit union examiner scam currently being committed? -----CORRECT ANSWER---------They can stall the transaction to give them more time to find a solution.
What if financial infidelity? -----CORRECT ANSWER---------Lying about or hiding the true state of the family's finances from one's spouse or partner. What is the word which means people's deeply held principles on standards of behavior? -----CORRECT ANSWER---------Values What is a secured credit card? -----CORRECT ANSWER---------One that requires the cardholder to maintain a savings account as security for the card's line of credit. What is a hard hit as it pertains to the "new credit accumulations" segment of the credit score? -----CORRECT ANSWER---------A hard hit is a request for new credit that impacts your score. How should adults in the family handle information about financial problems? ----- CORRECT ANSWER---------All family members should be told if there are financial problems. What kind of goals are most effective in helping an individual or family achieve change? -----CORRECT ANSWER---------Goals which focus on what you want. What is the value of informing children about financial problems and asking them to help develop solutions? -----CORRECT ANSWER---------Children learn how to deal with or avoid similar financial issues when they are adults. Definition of capacity regarding credit? -----CORRECT ANSWER---------How much credit you are able to handle. Engine catching fire -----CORRECT ANSWER---------Comprehensive insurance 3000/ 25% -----CORRECT ANSWER---------75% Money avoidance is the idea that money is evil or ______________ ---CORRECT ANSWER--------undeserved
There are four steps in the member's change process. In sequential order they are:
- Recognizing the _________ for change.
- Gather ___________ and introduce new ideas.
- ______________ plan as needed.
- Make _____________ a part of the member's habits. ---CORRECT ANSWER-------- Need information revise changes Help members prioritize essentials so they spend on ___________ instead of ____________. ---CORRECT ANSWER--------needs, wants Examining forces for or against a specific action are part of a _____________ ______________ _____________________. ---CORRECT ANSWER--------Force field analysis The counseling process contains six steps. In sequential order, they are:
- ____________ member data
- Establish clear financial _____________ and objectives.
- _________________ data.
- _____________ a spending, debt repayment and action plan
- _______________ plan.
- Monitor, evaluate, and ______________ as needed. ---CORRECT ANSWER-------- collect goals analyze develop implement adjust a ____________ plan looks at the sources of income and where clients spend their money. ---CORRECT ANSWER--------spending Cash _____ is the term to define money in and out of a client's budget. ---CORRECT ANSWER--------flow T or F
At least 3 recent paycheck stubs should be reviewed when gathering a member's financial information. ---CORRECT ANSWER--------True When analyzing expenses it is important to consider a 12 month cycle to take ____________ ______________ into account which include rising utility costs for additional air in the summer and heat in winter as well as back to school expenses every fall. ---CORRECT ANSWER--------seasonal variations Options for increasing ______________ include working overtime, getting a second job, selling something and setting long term goals ---CORRECT ANSWER--------income Accelerating debt repayment can be done by paying more on principal, rolling up payments of the same amount monthly, or paying off ____________ _____________ debts first. ---CORRECT ANSWER--------high interest T or F Since 2010 federal law requires consumers to have a choice to opt-in to overdraft programs. ---CORRECT ANSWER--------True ____________ loans are the costliest way to handle cash flow problems. ---CORRECT ANSWER--------Payday When planning a trip, choose the vehicle that gives the best ___________ for that trip. - --CORRECT ANSWER--------mileage Secure vehicle financing for a vehicle ____________ you shop and consider how much you can afford for the vehicle plus insurance and upkeep. ---CORRECT ANSWER-------- before _____________ savings helps members cope with unexpected expenses. --- CORRECT ANSWER--------Emergency ___________ _________________ savings helps members plan for known future expenses. ---CORRECT ANSWER--------Set aside
T or F Marital status is not a factor in the credit scoring systems. ---CORRECT ANSWER-------- True When budgeting after a divorce, it is recommended that a member be conservative and choose ___________ that is less expensive that one can afford until they have a better understanding on their new financial status. ---CORRECT ANSWER--------Housing A challenge of self-employment includes maintaining a reliable source of income and preparing for ______________ fluctuations in income ---CORRECT ANSWER-------- seasonal Small businesses can acquire __________ from lines of credit, credit cards, personal loans and savings ---CORRECT ANSWER--------Capital Paying bills ________ ____________ is the most important thing members can do to improve credit rating ---CORRECT ANSWER--------on time The three main credit reporting agencies are ____________, ______________, and _______________. Each calculate credit scores individually. ---CORRECT ANSWER--- -----Equifax, Experian, Transunion Credit reports contain identifying information, __________ history, public records including collections and credit inquiries in the last 2 years. ---CORRECT ANSWER------ --payment T or F Income information is included in a credit report ---CORRECT ANSWER--------False Members can get a free copy of their credit report _________ a year ---CORRECT ANSWER--------once Credit reporting agencies investigate all claim disputes within ________ days. --- CORRECT ANSWER-------- 30
FICO scores range from a low of 300 to a high of _________. ---CORRECT ANSWER-- ------ 850 ____________ is the amount of available credit a member has an dits accounts for 30% of a credit score. ---CORRECT ANSWER--------capacity The largest influence on a credit score is a member's payment _________ and it accounts for 35% of a credit score. ---CORRECT ANSWER--------history __________ payments can decrease a credit score up to 70 points by how frequent, recent, and severe the delinquency. ---CORRECT ANSWER--------Missed Creditors can turn to the courts to place __________ to collect outstanding debts. --- CORRECT ANSWER--------judgments _________________ is the withholding of a member's pay that is submitted to a creditor to pay a debt. Child support is the most common reason for this action. ---CORRECT ANSWER--------Garnishment When communicating with a creditor, members should be ___________. ---CORRECT ANSWER--------proactive T or F A "twelve month interest free" offer from a retailer is very beneficial for members with limited income who need extra time to pay their debt. ---CORRECT ANSWER-------- False Credit card fees, risk of identity theft, danger of overspending, and interest charges are ____________________ of credit cards. ---CORRECT ANSWER--------disadvantages ___________ rates may not be the best deal because of balance transfer fees, length of time for lower rate, credit terms after promotional rate expires, and annual fees --- CORRECT ANSWER--------teaser
