CSI AFP-Exam-1 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Technical Competencies | 84% | - Asset and Liability Management - Risk Management and Insurance - Tax Planning - Retirement Planning - Investment Planning - Estate Planning |
| Topic 2: Enabling Competencies | 16% | - Professional Conduct and Regulatory Compliance - Client Relationship and Practice Management |
CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:
Question #1
Dianna has just taken a 20-year mortgage and wants insurance only to ensure the mortgage can be repaid if she dies during that period. She is considering whole life insurance. What should her planner most likely explain?
A. Whole life is always cheaper for temporary mortgage needs.
B. Critical illness insurance replaces life insurance for mortgage protection.
C. Term insurance is generally better aligned with a temporary liability.
D. No insurance is needed if the mortgage is insured by the lender.
Question #2
Camila's firm recently issued their client, Shawn, an investment management fee summary on his non- registered investment portfolio for $5,000 in carrying charges. Shawn's federal tax rate is 29% and his provincial tax rate is 15%. What will be Shawn's tax savings on this investment management fee?
A. $2,200.
B. $1,450.
C. $750.
D. $0.
Question #3
A planner establishes a long-term target portfolio of 65% equities and 35% fixed income based on the client's objectives and constraints, with periodic rebalancing. Which allocation approach is being used?
A. Tactical asset allocation.
B. Speculative allocation.
C. Strategic asset allocation.
D. Market timing.
Question #4
Kendrick, age 55, owns a successful small business, ZXC Inc., valued at $800,000. Kendrick has extensive savings outside of the business and would like to pass the company onto his son at some point in the future.
Kendrick expects the business to increase in value $25,000 per year. If Kendrick decides to use an estate freeze to reduce the amount of taxes he will be required to pay, his financial planner should recommend that he implement the estate freeze at which point in relation to gifting the business to his son?
A. One month prior to gifting the company.
B. Immediately.
C. At the same time as gifting the company.
D. To take effect at the time of his passing.
Question #5
Carla, a financial planner, is meeting with a long-standing client, Jonathan. Jonathan informs Carla that he is upset and disappointed with the negative returns experienced with his investment portfolio. After acknowledging Jonathan's concerns, what should Carla's first step be in addressing his complaint?
A. Remind Jonathan about the risks associated with investing, as well as the possible volatility and impact on investment returns.
B. Offer alternative investment options in line with Jonathan's risk tolerance.
C. Remind Jonathan that investing is a long-term process and losses will likely be recovered.
D. Revisit Jonathan's goals, objectives and risk tolerance with him.
Solutions:
| Question #1 Correct Answer: C | Question #2 Correct Answer: A | Question #3 Correct Answer: C | Question #4 Correct Answer: B | Question #5 Correct Answer: D |
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