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CSI AFP-Exam-1 Exam Syllabus Topics:

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

1. 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) Market timing.
B) Strategic asset allocation.
C) Tactical asset allocation.
D) Speculative allocation.

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) $1,450.
B) $750.
C) $0.
D) $2,200.

3. A client wants to increase net worth by identifying spending reductions and increasing monthly surplus.
Which document is most useful for this purpose?

A) Current cash flow statement and budget.
B) Investment policy statement only.
C) Net worth statement only.
D) Beneficiary designation form.

4. Ram Patel, age 65, is meeting with his financial planner, Maria Romano, to complete a financial plan. Ram is retiring this year, and his company provides a defined benefit pension plan. Upon retirement, he has the choice of receiving $20,000 each year for 20 years or until death (whichever is earlier), or he can take
$304,300, which is the commuted value at retirement. Ram has confirmed that he will be transferring the commuted value to a LIRA. After further discovery, Maria suggests that they utilize a 5% market rate of return and project the funds to last 25 years. What should Maria update Ram's projected annual retirement income to?

A) $20,000.
B) $21,000.
C) $24,418.
D) $21,591.

5. Suzy, age 45, is meeting with a financial planner as she has recently inherited $1.25 million from her late aunt. Suzy has poor spending habits and would like to review options that would safeguard and help her receive stable cash flows. She does not have a lot of experience investing and would like to avoid making day- to-day investment decisions. Which type of investment account is most appropriate for Suzy?

A) Discretionary fee-based.
B) Multi-mandate managed.
C) Straight life annuity.
D) Separately managed.

Solutions: