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

1. Sapphire, age 35, a recent widow, is still in the grieving stage. She has just received a large insurance payout.
She has limited savings, a long-term time horizon, and a high tolerance for risk. What investment strategy should her financial planner recommend until Sapphire is better able to understand her new situation?

A) Deposit the funds into a high-risk investment portfolio.
B) Deposit the funds into a moderate risk investment portfolio.
C) Deposit the funds into a high interest savings account.
D) Deposit the funds into a portfolio of traditional and index-linked guaranteed investment certificates.


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


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


4. If a deceased person was entitled to rights or things at death, what strategy should the estate representative use to enhance the net estate value after tax?

A) Include the rights or things in a second personal tax return for the deceased.
B) Transfer ownership of the rights or things to the beneficiaries of the estate.
C) Include the rights or things in the deceased's final personal tax return.
D) File for annual tax reassessments on the terminal tax return until all rights or things are paid.


5. Bill was recently declined for a loan application at his financial institution, and he is concerned that a liability has been added to his credit bureau that does not belong to him. He asks his financial planner to review his credit bureau with him to help him identify why he may have been declined. Which area of the credit bureau might his financial planner advise Bill to review?

A) Number of previous declines.
B) Inquiries.
C) Account history.
D) Public record information.


Solutions:

Question # 1
Answer: C
Question # 2
Answer: D
Question # 3
Answer: B
Question # 4
Answer: A
Question # 5
Answer: C

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