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CSI AFP-Exam-1 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Estate Planning | 13% | - Estate Transfer Strategies - Powers of Attorney - Trust and Beneficiary Planning - Wills |
| Topic 2: Risk Management and Insurance | 12% | - Risk Transfer Strategies - Disability and Health Insurance - Life Insurance - Risk Assessment |
| Topic 3: Asset and Liability Management | 11% | - Cash Flow Management - Debt Management - Budgeting - Personal Balance Sheet Analysis |
| Topic 4: Client Relationship and Practice Management | 6% | - Communication and Advisory Process - Client Discovery - Practice Management |
| Topic 5: Retirement Planning | 17% | - Registered Retirement Savings Plans - Retirement Income Strategies - Retirement Needs Analysis - Pension Plans |
| Topic 6: Tax Planning | 14% | - Registered Plans - Tax-Efficient Strategies - Income Tax Fundamentals - Tax Deductions and Credits |
| Topic 7: Investment Planning | 17% | - Investment Theory - Asset Allocation - Portfolio Construction - Investment Products |
| Topic 8: Professional Conduct and Regulatory Compliance | 10% | - Regulatory Requirements - Ethics and Professional Standards - Compliance Responsibilities |
CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:
Question 1
William and Jennifer are selling their business which qualifies as a Canadian-controlled private corporation.
When the sale is complete at the end of this year, William and Jennifer will each receive $4 million for their common shares which have nominal cost. Jennifer has unused capital losses from previous years. They are meeting with Laurel, their financial planner, to discuss the tax implications of the sale. Based on the information provided, what should Laurel recommend to William and Jennifer so that they are best able to make use of the Lifetime Capital Gains Exemption?
A. They should each claim 100% of the exemption.
B. They should each claim 50% of the exemption.
C. Only Jennifer should claim 100% of the exemption.
D. Only William should claim 100% of the exemption.
Question 2
Mina has $20,000 in a savings account earning 3% before tax. She also has a $9,000 credit card balance at
22%, a $7,000 unsecured line of credit at 10%, and a $14,000 car loan at 4%. Her marginal tax rate is 35%.
Which liability should she target first?
A. Car loan.
B. No debt; keep all funds in savings.
C. Unsecured line of credit.
D. Credit card balance.
Question 3
A business owner completes an estate freeze, taking back preferred shares with a fixed redemption value while children receive common shares. What is a primary risk of this strategy for the owner?
A. The freeze automatically eliminates all tax at death.
B. The children can never benefit from future growth.
C. The owner's retained preferred shares may not provide adequate income or inflation protection.
D. No future growth can occur in the corporation.
Question 4
Jonathan owns a medium size consulting firm and earns an average annual income of $150,000. He is reviewing his retirement plan with his financial planner. Jonathan asked his planner about retirement compensation arrangement and how this may benefit him. What should his financial planner tell him?
A. It results in a pension adjustment and withdrawals are tax-exempt for the recipient.
B. It leaves RRSP contribution room unaffected and is exempt from regulatory limits.
C. It is exempt from regulatory limits and withdrawals are tax-exempt for the executive.
D. It reduces RRSP contribution room but is exempt from regulatory limits.
Question 5
Ali wishes to retire in five years. His financial planner calculates that he needs to save an additional $40,000 to meet his retirement income objectives. What would Ali's financial planner advise him to do in order to meet his retirement income objectives?
A. Reduce current expenses.
B. Purchase a whole-life insurance and invest within the policy.
C. Take out a mortgage to invest and fund some of the retirement income shortage.
D. Invest more in equity market to achieve a higher return.
Solutions:
| Question 1 Answer: D | Question 2 Answer: D | Question 3 Answer: C | Question 4 Answer: B | Question 5 Answer: A |

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