Tips for Answering Multiple Choice Questions

The theory of a multiple choice question test is that with a large number of questions, the student’s score will actually reflect his or her knowledge of the subject. In practice, multiple choice tests cannot determine accurately and fully a student’s knowledge of the subject matter. A student may understand part or all of a particular subject area and still fail to answer the multiple choice question correctly. Similarly, a student who does not know a given subject matter may correctly select the answer and receive full credit.

Students must remember that when the test is being graded, the score is not necessarily based on their knowledge of the subject, but on the number of correct answers marked on the answer sheet. Unfortunately, the CFP Board of Standards does not disclose the percentage of correct answers required for a passing score. The score is based only on the number of questions answered correctly. There is no penalty for guessing, so be sure to put down an answer to every question.

Even when you are uncertain of the answer, you should make an attempt at it. Do not spend a lot of time agonizing over choices. Many students have told us that there is absolutely no time to waste in the CFP® Certification Examination. You need to answer all of the questions, so use the process of elimination to narrow down answer choices if possible, then choose an answer and mark the question for review later. Something may trigger an answer when you return to it later.

The first rule is always to answer all of the questions. Before the end of the allotted time, be sure to mark all of the questions, even if you have to pick the answers at random in the last minute.

Some students find that they are able to work more efficiently through the case study questions on the examination by skimming the questions before reading the facts of the case study. As they read the case study information, the students will know what facts to look for, and they can underline or highlight important information. Since they know from reading the questions what information is important, they will not waste time on distractions and irrelevant issues, and their reading will also be more focused.

The examination is divided into three parts. There is a four-hour session on Friday afternoon and two three-hour sessions on Saturday. Each of the first two sessions includes a comprehensive case study with multiple choice questions. You should be careful for each part of the examination to budget your time to ensure that you answer every question and that you do not spend too much time on any one question. For example, students are given three hours (180 minutes) to answer 85 questions during each of the Saturday sessions. This means you have, on the average, around two minutes for each question. You should try to answer each question within a minute and a half. You can check whether you are on schedule after approximately 20 questions. Check again after 40 questions, and every additional 20 questions after that. If you follow this plan, you will have approximately 30 minutes left at the end of the test to review and reconsider any questions you marked for review. For some questions, a minute and a half is more time than you will need to read and select an answer. Other questions may require more time, but you should try not to spend too much time on any one question. If a question is difficult or confusing, mark an answer and note the question so that you can come back to it at the end of the examination. Otherwise, you will spend too much time early in the examination on a few difficult questions and leave too little time for other questions which you might be able to answer correctly.

Even when you are dealing with questions that are familiar to you and you feel confident of your knowledge, take the time to read all of the options. The temptation is to select what looks to be the right answer and to skip over the other options. Do not skip the other options. Read every option and then choose the best answer. Too often, a student will select an answer that seems plausible and will fail to consider an aspect of the problem that would be revealed simply from a reading of the other answer choices.

You should plan on using the entire time allowed for the examination. You do not get any points for finishing early. When you have seen all the questions on the test, go back to review the questions you marked. You can take your time reviewing these questions. Many times, a student will realize the answer to a question from reading another question. Sometimes, the information needed to answer a question will suddenly be remembered.

Students should not try to memorize large quantities of information for this examination. Formulas, tax rates, phaseout ranges, mortality tables, and other information required to work problems are generally provided to students on the examination. Students will need to know how and when to use this information. Please refer to the key facts and figures sheet at the end of the study tips.

One of the paradoxes of multiple choice tests is that you get to see the answers during the examination. You don’t have to memorize material because the answer to each question is right there in front of you. You only have to identify it. Moreover, for questions with four choices, you begin with a 25% chance of selecting the correct answer even if you just make random guesses. All you need to do is to raise your percentage from the starting point of 25% to the passing score.

All of your preparation for the CFP® Certification Examination, including reading the Keir Comprehensive Review books and answering the questions, is designed to increase your chances of selecting correct answers to the questions. But, in addition to learning the subject matter, there are test-taking techniques that will improve your percentages. The strategy for taking tests is to try to improve the percentages on each question.

The best way to improve the percentages in your favor is to use the process of elimination. For each question, there are four choices, and just one is correct. If you are able to eliminate even one choice, your percentage climbs from 25% to 331⁄3%. If you can eliminate two choices, your percentage climbs to 50%. The process of elimination can be used even if you have little or no knowledge of the subject matter, but use a little common sense.

The process of elimination will work for you on the CFP® Certification Examination to raise your score. The technique can be demonstrated using sample questions. The way in which these questions are written illustrates the way in which questions will be drafted for the examination. Thinking in terms of eliminating the more obviously wrong answers will help you narrow the choices and improve your percentages.

The CFP® Certification Examination contains three types of questions: (1) the “basic type multiple choice,” (2) the “combination type multiple choice,” and (3) the “matching type” question. The “basic type” is shown by the following question:

Basic Type Multiple Choice Questions

1. When a life insurance application is submitted to an insurance company without the first premium, the application has the legal status of:
A. An acceptance 
B. A condition precedent to performance 
C. Consideration 
D. An invitation to offer insurance 

This “basic type” multiple choice question requires the student to complete the statement by selecting the correct choice among the four options. Many other “basic type” questions on the examination will require a calculation to produce the answer. In any event, with a “basic” question, only one option is correct, and the other three options are incorrect. You need to find the piece of the puzzle that fits the open space. In many cases, a matching question requires students to perform essentially a similar task. The student is matching pieces of a puzzle. Thus, matching questions are, in many cases, just straight multiple choice questions.

Even before you start to look for the right answer or the piece that fits the puzzle, you need to be certain you understand the intent of the question. You must be clear about what is being asked. In the sample question, for example, the student is asked to find the phrase that describes the legal status of the life insurance application. A student who reads the first part of the question about an application submitted without the first premium may jump to the conclusion that the question is about the payment of premiums. The student then thinks about the element that is missing for a contract. The student may see the word “consideration” and select choice C. The student missed the intention of the question and jumped to a wrong answer. You must approach a question with the idea of answering only the question being asked.

“I seek not to know the answers, but to understand the questions.”

- Caine, from the 1970’s TV series Kung Fu

After you have determined the intent of the question, you should begin to use the process of elimination. For the straight multiple choice question, the process of elimination should be used to discover the answers that are incorrect. By removing the incorrect answers, the field is narrowed. Hopefully, the field can be narrowed to one choice, which is correct. If you know or have learned the course information required to answer this question, you can probably identify the correct choice after simply reading the options. But, let’s suppose that you do not know the answer from the first reading. You should still follow the process of elimination to narrow the field.

Let’s say that you are able to eliminate choices B and C. Just from what you do know about the life insurance application and the law of life insurance contracts, you are able to conclude that choices B and C make no sense. You are unsure, however, whether submission of the application without a premium is an acceptance or an invitation for an offer. In other words, choices A and D seem plausible. You have now narrowed the field to the two most likely choices. Your chances of getting the right answer have now improved from 25% to 50%. Do not agonize between the two choices. Make your educated guess, mark the question for review, and move on to the next question.

For some questions, you will be able to narrow the field to two choices, and you will probably get about 50% of those questions right. The increase in percentages that moves you from 25% to 331⁄3% or to 50%, obviously, will mean an increase in your score. This increase in your percentages can be the difference between passing and not passing. For example, suppose out of 100 questions, you can find the correct answer for 50 questions, you can narrow the field to two choices in 20 more questions, and you can narrow the field to three choices in 15 more questions. What is your score likely to be? It will likely be 69%. In addition to the 50 questions for which you knew the answer, you will be likely to get 10 of the questions right that you narrowed to two choices, and you will be likely to get 5 of the questions right that you narrowed to three choices. Of the remaining 15 questions, you still have a 25% chance of getting the right answer and will probably get four more correct. Your total is 69%.

Notice that this process of elimination will work best for you if you use it with all of the questions. You must read and answer every question in order to make these percentages work for you. Moreover, you must read every option to be sure you have used the process of elimination correctly. You should practice using this process of elimination in answering the questions in the Simulated Examination.

The correct answer to Question 1 is D.

Combination Type Questions

Let’s take a look at another type of multiple choice question used on the CFP® Certification Examination. The next type is the “combination type” question, such as the following question:

2. Tax and non-tax advantages of S corporations include the fact that they:
(1)  Provide limited personal liability 
(2)  Are separate taxable entities 
(3)  Allow a pass-through of income and losses to shareholders 
(4)  Permit losses which may be limited by passive activity loss rules 
A. (1), (2), and (3) only 
B. (1), (3), and (4) only 
C. (2) and (3) only 
D. (3) only 

This “combination type” question is really four true-false questions combined into one multiple choice question. Notice that choice (3) is included in all choices, so you know that it is a correct choice. You don’t have to agonize over it. Notice also that choice (2) is included in two of the four choices. If you know that choice (2) is incorrect, you have narrowed the choices to only two. Your chances of getting the right answer have increased from 25% to 50%. You can make an educated guess. Make a selection, mark the question for review, and move on to the next question. Again, for the questions that you narrowed to two choices, you will probably get about half of them right. The correct answer to Question 2 is B.

Matching Type Questions

As we said earlier, matching questions are really just basic multiple choice questions. Usually, matching questions present the options first, and then the same options will apply to a number of different questions. For example, matching questions might be presented as follows:
A. Whole life insurance 
B. Term life insurance 
C. Universal life insurance 
D. Variable life insurance 

These choices would then be followed by a series of questions, such as:
3. Which life insurance is not cash value life insurance? 
4. Which life insurance provides death benefits that can change? 
5. Which life insurance provides a guaranteed rate of return for the policy owner? 

Since the choices for these questions are the same, they require less time to read and answer. For this reason, students should try to answer the matching questions early in a test session. By answering shorter questions first, students will save time for the more difficult questions and not miss out on the easier points that can be scored from matching questions. The answers to Questions 3, 4, and 5 are B, C, and A, respectively.

Sometimes, you can also improve your percentages by paying attention to certain key words. For multiple choice questions that require you to identify a correct statement, rather than just a phrase or a number, the word choice can be revealing. For example, a question such as the one that follows might appear on the CFP® Certification Examination:

6. Which of the following statements concerning the requirement of an insurable interest for the assignment of a life insurance policy is correct?
A. The assignee must have an insurable interest at the time of the assignment. 
B. The assignee is required to have an insurable interest during the lifetime of the 
insured. 
C. The assignee must have an insurable interest only at the time of death. 
D. The assignee usually need not have an insurable interest, either at the time of or 
after assignment. 

Each of the incorrect choices in this question reveals itself as incorrect by words such as “must,” “required,” and “only.” When these words appear in a statement, the assertion does not permit any exceptions. Consequently, if you can think of any specific exception, the statement is obviously incorrect, and you can eliminate the statement as a possible answer. There are many ways in which these choices can be written to make a general assertion. Try to get a sense of these general statements as you work with the application questions. The answer to Question 6 is D.

Remember to make use of everything you know and every resource at your command. Common sense is many times the best approach to finding the correct answer. Your experiences may provide you with clues to answers even though you may have forgotten the facts and figures presented in the review book.