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

1. Interest rates are expected to rise sharply. Which fixed-income security would normally have the highest price sensitivity to that change, all else equal?

A) High-interest savings account.
B) Twenty-year zero-coupon bond.
C) Floating-rate note.
D) Six-month treasury bill.


2. A couple has stable employment, two dependants, and essential monthly expenses of $5,200. They have no emergency reserve. Which recommendation is most appropriate before increasing long-term investment contributions?

A) Withdraw from RRSPs when emergencies occur.
B) Invest all surplus cash in a high-growth equity fund.
C) Build a liquid emergency reserve of roughly three to six months of essential expenses.
D) Use a credit card as the emergency plan.


3. 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.


4. A client refuses to provide details about debt balances, tax returns, and monthly expenses but asks the planner to confirm whether retirement at age 55 is achievable. What should the planner do?

A) Estimate the figures secretly from the client's age and income.
B) Proceed only with investment recommendations.
C) Use generic assumptions and present the plan as reliable.
D) Explain that the conclusion will be limited or unreliable without the missing information.


5. Demario, age 29, has started his own professional practice. He is single, has a mortgage, and his future earning power is his largest asset. Which insurance should receive priority?

A) Disability insurance.
B) Travel medical insurance only.
C) Whole life insurance for estate equalization.
D) Joint last-to-die life insurance.


Solutions:

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

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