CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:

1. Leena and Harry are married and hold RRSPs with a value exceeding $500,000. They are concerned about their final tax liability and want to cover the taxes after they have both died. What would their financial planner recommend them to implement in order for the couple to achieve the objective?

A) Set up a testamentary trust through their wills.
B) Transfer the funds into an inter vivos trust.
C) Update the beneficiary of the RRSP plans to each other.
D) Purchase a joint last-to-die permanent life insurance policy.

2. Keitaro wants his spouse to receive income from his assets for life after his death, but wants the remaining capital to pass to his children from a prior marriage after the spouse dies. Which strategy best fits this objective?

A) Outright gift of all assets to the spouse.
B) Adding the children as joint owners on all assets immediately.
C) Naming the estate as beneficiary of every account without trust provisions.
D) Testamentary spousal trust naming the children as capital beneficiaries.

3. At the first meeting, a financial planner explains her services, compensation, responsibilities, limitations, confidentiality practices, and what information the client must provide. Which document should normally capture these matters?

A) Trade confirmation.
B) Fund facts document.
C) Client agreement letter.
D) Retirement income projection.

4. Jonah is meeting with his client, Muhsina, who owns Myke Inc., a Canadian-controlled private corporation.
Based on current market value, if he decides to sell Myke Inc., Muhsina will have a capital gain of $400.000.
He expects the value of Myke Inc. to increase in future years and has a CNIL balance of $100,000. He wants the future increase in value to be taxed in the hands of his children, Teshi and Kaliyah, and to minimize the cost. What action should Jonah advise Muhsina to take to meet his goal?

A) Set up a joint account with Teshi.
B) Set up a joint account with Teshi and Kaliyah.
C) Sell #### Inc. to his children for $1.
D) Sell #### Inc. to his children at fair market value.

5. Priya grants her brother trading authority over her non-registered investment account. Her brother calls the financial planner and asks for Priya's full net worth statement, tax return, and beneficiary information so he can "help with planning." What should the planner do?

A) Provide all information because trading authority gives full access.
B) Decline the request unless Priya gives specific authorization for that information.
C) Provide only the investment account value and refuse everything else.
D) Disclose the information after confirming the brother's date of birth.

Solutions: