FICEP EXAM 2024 ACTUAL EXAM ( QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (A+, Exams of Finance

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FICEP EXAM 2024 ACTUAL EXAM ( QUESTIONS

AND CORRECT DETAILED ANSWERS WITH

RATIONALES (A+) ) ;; GUARANTEED PASS

Which cycle describes members who are just surviving and living paycheck to paycheck? a. Earn/spend/earn/spend b. earn/spend/borrow/spend c. earn/spend/save d. earn/borrow/spend/save - ANSWER Earn/Spend/earn/spend Financial counselors who don't use what they know about hemispheric thinking may fall into the trap of: a. Assuming the member will succeed if they work with the counsellor b. Asking too many questions c. Telling the member what they should do d. Presenting information to a member in a manner that might not be the best way to communicate - 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: a. Reminds members they are in control b. Communicates in an orderly, specific and straight-forward way c. Correlates with the right side of the brain d. Offers possibilities and suggestions - 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: a. Information that is known to the counselor and the member b. Information that is known to the counselor and not the member c. Information that is known to the member and not the counselor d. Information that is not known to either the member or the counselor - ANSWER Information that is known to the member and not the counselor Which type of counseling should a counselor use when a member is preparing for a large purchase? a. Preventive b. Procedural c. Productive d. Remedial - ANSWER Preventive Which of the following is NOT a counseling element a. Budget b. Credit. c. Debt d. Savings - ANSWER Savings Which of the following is a closed-ended question? a. Tell me more about that? b. Do you plan to move forward? c. What was your deciding factor? d. What is causing the hesitation? - ANSWER Do you plan to move forward? An example of pacing is when a counselor: a. wears the same type of clothing as the member. b. matches the member's tone.

c. matches the member's energy level. d. agrees with everything the member says. - ANSWER Matches the member's energy level How many steps are in the change process? a. 3 b. 4 c. 5 d. 6 - ANSWER 4 Which of the following decision-making tools is the best to use when considering all forces in favor of or against a plan so a decision can be made? a. Essential obligations b. Cost-benefit analysis c. Reframing d. Force-field analysis - ANSWER Force-filed analysis Which of the following is the first step of the counseling process? a. Analyze data b. Develop a spending plan c. Collect member data d. Establish goals and objectives - ANSWER collect member data It is best to divide a budget into which cycle? a. Daily b. Monthly c. Quarterly

d. Annually - ANSWER monthly Which of the following provides a credit history including debt repayment practices for an individual? a. cash flows b. net worth c. debt ration d. credit report - ANSWER credit report When discussing a member's budget analysis build in assumptions and adjustments to make sure the process allows for a a. 12 month cycle b. 24 - month cycle c. 36- month cycle d. 48 - month cycle - ANSWER 12 month cycle Which of the following is NOT a step that will reduce debt? a. Set goals b. Stop creating debt c. Borrow money from payday lenders d. Consolidate credit cards - ANSWER Borrow money from payday lenders Increasing a monthly payment beyond the minimum required by the credit issuer is known as: a. paying more on the principal. b. rolling up the payment. c. paying the high-interest debts first. d. paying the largest debt first. - ANSWER paying more on the principal

One disadvantage of leasing a car is a. equity builds every month b. inconsistent monthly payments c. locked into a contract d. no factory warranty - ANSWER locked into a contract When determining if a vehicle is affordable, which of the following is NOT important to consider? a. Purchase price b. Maintenance c. Insurance d. Ability to pay online - ANSWER Ability to pay online Which type of savings helps one cope when the unthinkable occurs? a. Set-aside b. Retirement c. Emergency d. Holiday - ANSWER Emergency A good action pan includes: a. the counselor completing a budget and giving it to the member b. a list of steps and timeline for the member to complete c. a list of family members to contact d. the counselor making creditor calls - ANSWER a list of steps and timeline for the member to complete

Which of the following is NOT an example of ways members may start saving: a. After a loan is paid off, deposit the old loan payment amount to savings b. Increase living standard expenses with each new raise c. Depositing bonuses or tax refunds to savings d. Have a portion of each paycheck directly deposited to a savings account - ANSWER Increase living standard expenses with each new raise "Safety-net savings" is designed to help members: a. Through a period of reduced or lost income. b. Pay for occasional or periodic expenses. c. Reach a long-term goal. d. Sustain income during retirement. - ANSWER Through a period of reduced or lost income. One way to overcome a member's objection to financial counseling is to: a. Simply dismiss any negative comments a member makes b. Speak in a loud tone to reinforce authority as a counselor c. Refer member to another financial counselor d. Express confidence in member's ability to address problem - ANSWER Express confidence in member's ability to address problem You can help couples and families who have difficulties talking through money issues by doing all of the following except: a. Have each person write down individual goals and then share with each other b. Discuss individual goals and how members may work together to accomplish them c. Meet with members separately for financial counseling d. Agree on a scheduled time to check goal progress and make modifications - ANSWER meet with members separately for financial counseling Which of the following statements is FALSE regarding the steps that can help families change habits?

a. Children can be absent from discussions because spending changes will not affect them. b. Parents must present a united front when talking with children about money c. Recognizing progress with positive feedback can keep everyone focused on the goals. d. Once problem areas are identified, develop strategies to save money. - ANSWER Children can be absent from discussions because spending changes will not affect them. When dealing with credit during a divorce, which of the following is FALSE? a. A divorce decree may specify which party is responsible for repaying which debts. b. If one spouse falls behind on payments of a jointly held account, both parties are responsibilities. c. Martial status not a factor in credit scoring systems d. Late payments on jointly held debts will not be reflected on both credit reports. - ANSWER Late payments on jointly held debts will not be reflected on both credit reports. Seasonal employees must: a. Not be concerned with ebbs and flows in monthly income b. Plan for times when income is low c. Avoid overuse of outside resources like food share programs d. Only worry about current income and not dwell on future shortfalls - ANSWER Plan for times when income is low When you own your own business, accounts payable is the: a. Amount of money others owe you b. Money that you anticipate the government will reimburse you c. Amount of money you owe others d. Difference between your assets and liabilities - ANSWER Amount of money you owe others Which of the following statement is false?

a. Using credit only builds a positive credit history if the lender submits information to a CRA. b. Lenders regularly report on-time and delinquent payments c. Becoming an authorized user means the user is required to acquire debt d. Unpaid overdrafts may be reported to CRAs - ANSWER Becoming an authorized user means the user is required to acquire debt Your credit report will NOT include a. Identification and employment information b. Income and asset information c. Payment history d. Public record information - ANSWER Income and asset information Identification and employment information includes all EXCEPT a. Name b. Date of birth c. Spouse's name d. Race/ethnicity information - ANSWER Race/ethnicity information Which of the following statements about credit score analysis is FALSE: a. Payment history has the least influence on one's credit score b. to improve one's capacity, a member needs to pay off debt rather than transferring it c. The largest single influence on a credit score is an individuals payment history d. It can be counterproductive to close older, well-established credit lines - ANSWER Payment history has the least influence on one's credit score Which of the following statements about actions that lower credit scores is false?

a. The 3 ways late payments can hurt credit scores are frequency, recent, and severity b. Maxed-out credit cards may reduce credit scores by as much as 100 points c. Closed accounts in good standing are usually removed from the credit report within ten years d. inquiries do not impact credit scores - ANSWER inquiries do not impact credit scores Individuals with high credit scores have: a. History of closing loans soon after opening them b. High percentage of available revolving credit c. Many credit cards or loans with balances d. Low percentage of available revolving credit - ANSWER High percentage of available revolving credit Which of the following statements is true? a. A judgement is an arbitrary ruling that settles a lawsuit by defining the obligations of the parties involved. b. A lien is a verbal claim against a specific item owned by a debtor c. There is a federal law that says wages can be garnished for child support payments d. A garnishment foes not require an employer to withhold a specific amount from an employee's wages to repay debt - ANSWER There is a federal law that says wages can be garnished for child support payments When dealing with creditors/collectors, it is important for members to: a. Be proactive b. Avoid them altogether c. Be honest and tell the collector they have no intention of paying d. Extend the time to pay the collections for as long as possible - ANSWER Be proactive Which of the following statements is false?

a. Once a collection is paid, the negative history is immediately removed from one's credit report b. Collection agencies are open to the negotiation. c. In some situations, it may be beneficial to settle a debt in collections. d. Members should never agree to an unaffordable payment plan - ANSWER Once a collection is paid, the negative history is immediately removed from one's credit report The amount a cardholder is required to pay each month is the: a. Late fee. b. Annual fee. c. Grace period. d. Minimum payment. - ANSWER Minimum payment. Which of the following is an advantage of using a credit card? a. There is not a fee for a late payments b. One's credit score is not impacted by late payments c. Peace of mind knowing funds are available d. Identifying theft is impossible when using a credit card - ANSWER Peace of mind knowing funds are available Which of the following statements is false regarding tips to avoid credit card problems? a. Avoid using credit cards to finance an unaffordable lifestyle b. Accept unsolicited increases to credit limit to help maximize borrowing power c. Pay more than the minimum payment when possible d. don't have a high balance when relaying on temporary teaser rates - ANSWER Accept unsolicited increases to credit limit to help maximize borrowing power Which of the following statements is false?

a. Simply receiving a medical bill does not affect a credit score b. Paying a medical bill a few days late does not affect a credit score c. Medical bills affect a credit score if a collection agency is involved d. If a medical bill is ultimately paid by an insurance company, the CRA's do not have to remove the item from the credit reports - ANSWER If a medical bill is ultimately paid by an insurance company, the CRA's do not have to remove the item from the credit reports Which of the following statements is true? a. Estate obligations must be paid prior to any inheritance being paid b. Beneficiaries are a priority in distributions of an estate c. Surviving family members are always responsible to pay the deceased's medical bills d. Probate courts cannot decide which estate's assets must be sold - ANSWER Estate obligations must be paid prior to any inheritance being paid While counseling members, when is the best time to ask if they have medical debt? a. During bankruptcy proceedings b. During an initial needs assessment c. During garnishment proceedings d. Depositing their payroll check - ANSWER During an initial needs assessment When it comes to addressing medical debt, counselors need to: a. Contact the medical provider for the member b. Assemble documentation and complete paperwork for the member c. Complete and submit applications for public health insurance for the member d. Coach members how to handle medical debt - ANSWER Coach members how to handle medical debt

A rule of thumb for education funding is known as the: a. savings principles b. Savings rule c. Rule of thirds d. Rule of fourths - ANSWER Tule of thirds Student loan refinancing means a. Taking out a new loan to pay off existing loans b. One will never lose loan benefits c. A federal student loan may be forgiven or discharged d. Only federal loans can be included in a refinance - ANSWER Taking out a new loan to pay off existing loans One needs to consider the lending amount (minimum and maximum), income requirements, and cosigner release when a. Considering student loan default. b. Comparing refinance companies. c. Comparing mandatory and general forbearance. d. Considering mandatory forbearance. - ANSWER Comparing refinance companies Which of the following statements is false? a. Borrowers should avoid defaulting on student loans b. Social security wages may be garnished if a federal student loan is in default c. Wages can not be garnished if a federal student loan is in default d. If a federal student loan is in default, it will be turned over to a collection agency - ANSWER Wages can not be garnished if a federal student loan is in default Which is false? Seniors may have student loan debt because they:

a. Discharged it in their bankruptcy b. Cosigned loans for children c. Consigned loans for grandchildren d. Took out a parent PLUS loan - ANSWER Discharged it in their bankruptcy Which of the following is not a way in which repossessions can occur? a. Self-help (creditors retrieves vehicle and may do so without debtor's knowledge) b. Judicial (creditor obtains a court order to work with legal authorities) c. Voluntary surrender d. Cure default - ANSWER Cure default Which of the following is not a secondary product that can be added to a vehicle loan to help in case an emergency occurs? a. GAP insurance b. Full coverage automobile insurance c. Credit life and disability insurance d. Extended warranty - ANSWER Full coverage automobile insurance Which of the following statements is true? a. Owning generally builds property equity b. Owning a home is always the best investment c. Renting is best if one is likely to remain in one place for many years d. Owning is generally less expensive - ANSWER Owning generally builds property equity Which if the following statement is false?

a. Two types of home equity borrowing are available: home equity loans and HELOCs b. A HELOC is usually structured as a revolving loan with a variable monthly payment c. Members who are refinancing debt should be encouraged to use a HELOC d. A home equity loan offers set terms that may help keep members on track - ANSWER Members who are refinancing debt should be encouraged to use a HELOC When a member is experiencing severe financial problems, it's important to a. Treat all debts equally b. Help the member maintain the same lifestyle c. Determine if member is judgement-proof d. Ignore collection letters until member is ready to pay - ANSWER Determine if member is judgement- proof Which of the following statements is false? a. A HUD approved housing counselor will contact the mortgage company before foreclosure proceedings begin b. Financial counselors can help members figure out how much they can pay as part of a workout plan c. Find a plan that is feasible for the member and acceptable to the lender d. Lenders are more willing to work with members in the late stages of foreclosure rather than early in the process - ANSWER Lenders are more willing to work with members in the late stages of foreclosure rather than early in the process Which of the following statements is false? a. Nontax governmental penalties are not - ANSWER