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CSI AFP-Exam-1 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Enabling Competencies | 16% | - Client Relationship and Practice Management - Professional Conduct and Regulatory Compliance |
| Technical Competencies | 84% | - Retirement Planning - Risk Management and Insurance - Tax Planning - Investment Planning - Asset and Liability Management - Estate Planning |
CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:
1. Which assets will flow through an estate?
A) Assets which the owners are registered as joint tenants with rights of survivorship.
B) Assets held in an inter vivos trust.
C) Assets which the owners are registered as tenancy in common.
D) Business assets covered by a buy-sell agreement.
2. A client sends an email alleging that a mutual fund recommendation was unsuitable because the fund declined sharply after purchase. The client asks for compensation. What is the financial planner's first professional obligation?
A) Remind the client that all investments can lose money and close the matter.
B) Document the complaint and follow the firm's complaint-handling procedure.
C) Promise reimbursement to preserve the relationship.
D) Delete the email if the account forms were signed correctly.
3. Richard pays periodic spousal support and child support under a written separation agreement. Which statement is generally correct?
A) Spousal support is never relevant for tax planning.
B) Child support is taxable to the recipient if paid monthly.
C) Qualifying periodic spousal support may be deductible to Richard and taxable to the recipient, while child support is generally neither deductible nor taxable.
D) Both spousal and child support are always deductible to Richard.
4. Jenny and Herman are looking for tax strategies that will help them better manage their marginal annual tax rates. Jenny is currently the primary income earner in the household. She has a large non-registered portfolio that holds only plain vanilla S & P 500 index funds. Jenny and Herman have a 14-year-old daughter, and they would also like to know what income-splitting opportunities exist. They've presented several ideas to their tax planner, Isaac, for review. Which of the following will likely result in tax attribution to Jenny?
A) Jenny lends her portfolio to Herman at the Bank of Canada's prescribed interest rate.
B) Jenny sells her equity security holdings to Herman at fair market value.
C) Jenny contributes to a spousal RRSP, which Isaac converts to a spousal RRIF and begins minimum required withdrawals in the first year after funding.
D) Jenny gifts her portfolio to her daughter who will claim any future investment income on her tax return.
5. 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) Critical illness insurance replaces life insurance for mortgage protection.
B) Term insurance is generally better aligned with a temporary liability.
C) Whole life is always cheaper for temporary mortgage needs.
D) No insurance is needed if the mortgage is insured by the lender.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: B |



