Online Access Free AFP-Exam-1 Practice Test

A client believes that security prices quickly reflect public information and wants broad Canadian equity exposure with low cost and minimal manager discretion. What investment best matches this view?

• A.Sector-specific hedge fund.
• B.Portfolio of five selected mining stocks.
• C.Canadian index exchange-traded fund.
• D.One-year cashable GIC.

In order to increase the assets in Rebecca's retirement savings, her financial planner is considering making a number of recommendations. Prior to obtaining her current employment, she withdrew funds from her RRSP under the Lifelong Learning Plan to upgrade her skills. She has four annual installments remaining on her Lifelong Learning Plan withdrawal and a small amount of savings in a TFSA. Rebecca now works as a sales associate in a small clothing store that has a group RRSP program for all employees which matches employee contributions. Which recommendation provides the best long-term impact to grow her retirement savings?

• A.Enroll in her company's group RRSP program and start a monthly contribution.
• B.Transfer her existing TFSA savings to her RRSP and start a monthly contribution plan.
• C.While keeping within her risk tolerance, maximize the equity component of her RRSP and TFSA plans in order to achieve significantly better returns over time.
• D.Repay the final four annual installments remaining on her Lifelong Learning Plan and start a monthly contribution plan to her RRSP.

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

Derek recently inherited $900,000. He asks his financial planner to invest the entire amount in a concentrated portfolio of junior mining stocks. Derek has never invested before, has two young children, and is still deciding whether to purchase a home. What should the planner do first?

• A.Invest half immediately and hold half in cash without further discussion.
• B.Review Derek's objectives, risk tolerance, risk capacity, time horizon, and liquidity needs.
• C.Refuse to work with Derek because he suggested a speculative portfolio.
• D.Place the trades because Derek has given clear instructions.

Clara invested $150,000 with Roper Counsel, a member of CIRO. Her portfolio consists entirely of Canadian mutual funds. Roper Counsel recently became insolvent and declared bankruptcy. Where can Clara seek help to recover her financial losses due to this event?

• A.MFDA Investor Protection Corporation.
• B.Assuris.
• C.Canadian Investor Protection Fund.
• D.Office of the Superintendent of Financial Institutions.