Preview Questions Financial Planner | Role Specific Skill

Question 1: What tax advantage does a Roth IRA provide in estate planning?

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Roth IRA assets can be distributed without penalty after the owner's death

Roth IRAs are subject to estate tax

Roth IRA assets can be transferred to beneficiaries without tax liability

Roth IRA distributions are exempt from federal income tax

Question 2: In the context of financial planning, what does the Monte Carlo method primarily assess?

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Predicting long-term interest rates

Risk and uncertainty in investment returns

Portfolio diversification effectiveness

Predicting market volatility

Question 3: In BFSI, what is the primary reason for using surrogate keys in data models?

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To reduce data redundancy

To avoid performance bottlenecks

To simplify data extraction

To maintain referential integrity

Question 4: What is the primary purpose of an Irrevocable Life Insurance Trust (ILIT) in estate planning?

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To provide liquidity for estate taxes while keeping life insurance proceeds out of the taxable estate

To ensure immediate inheritance without legal complications

To allow tax-free distributions to heirs

To enable the policyholder to retain control of the life insurance policy

Question 5: Which of the following would be the most important consideration when selecting investment products for retirement planning?

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Performance history

Tax advantages

Liquidity and access to funds

Risk tolerance and time horizon

Question 6: In financial planning, which of the following techniques is best suited for assessing the long-term financial stability of an insurance company?

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Cash flow projections

Sensitivity analysis

Dynamic financial analysis

Liability modeling