RFC® Registered Financial Consultant Exam

Question 1

Under a cross-purchase buy-sell agreement, who purchases a departing owner's business interest?

The business entity itself The surviving owners individually A trustee designated by the agreement The departing owner's estate

Correct Answer:

The surviving owners individually

Question 2

Which primary advantage does a cross-purchase buy-sell agreement provide to surviving owners compared to an entity purchase (stock redemption) agreement?

Fewer life insurance policies are required Surviving owners receive a stepped-up cost basis in the purchased interest The business entity pays all premiums Transfer taxes are completely eliminated

Correct Answer:

Surviving owners receive a stepped-up cost basis in the purchased interest

Question 3

A 'wait-and-see' buy-sell agreement is best described as one in which:

The business has no obligation to purchase a departing owner's interest The entity has first right to purchase, followed by the surviving owners if the entity declines Surviving owners must decide whether to buy at the time of the triggering event The purchase price is determined after the triggering event occurs

Correct Answer:

The entity has first right to purchase, followed by the surviving owners if the entity declines

Question 4

Which business valuation approach estimates value by dividing a company's normalized earnings by an appropriate capitalization rate?

Asset-based approach Market comparable approach Income approach using capitalization of earnings Liquidation value approach

Correct Answer:

Income approach using capitalization of earnings

Question 5

Which business entity form avoids double taxation while providing all owners with limited liability protection?

C Corporation General Partnership S Corporation Limited Partnership with a corporate general partner

Correct Answer:

S Corporation

Question 1

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About this Exam

Prepare with the RFC® Registered Financial Consultant Exam practice quiz. This question bank includes 150 questions covering planning, management, financial, consultant, and risk. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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RFC® Registered Financial Consultant Exam

This practice set contains 150 questions from the matching question bank and focuses on planning, management, financial, consultant, and risk. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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RFC® Registered Financial Consultant Exam

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