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CSI AFP-Exam-1 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Technical Competencies84%- Asset and Liability Management
- Estate Planning
- Investment Planning
- Retirement Planning
- Risk Management and Insurance
- Tax Planning
Topic 2: Enabling Competencies16%- Client Relationship and Practice Management
- Professional Conduct and Regulatory Compliance

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CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions (Q112-Q117):

NEW QUESTION # 112
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?

Answer: B

Explanation:
The client's belief is consistent with efficient-market thinking: if prices already reflect public information, paying for active security selection may add cost without reliable excess return. A Canadian index ETF offers broad market exposure, transparent holdings, intraday liquidity, and generally low management cost. Option B relies on active or alternative management and may involve leverage, shorting, concentration, or complex strategies that conflict with the stated preference. Option C introduces substantial unsystematic risk because five mining stocks do not represent the Canadian equity market. Option D preserves capital but does not provide equity-market exposure. The planner should still perform suitability work: risk tolerance, time horizon, liquidity needs, tax location, and concentration in the client's existing assets must be reviewed. The product answer is not "ETF because ETFs are always best"; it is ETF because the investment philosophy and desired exposure point to passive, diversified market replication. References/topics: efficient market theory, passive investing, ETFs, diversification.


NEW QUESTION # 113
Lois is reviewing her client Raj's retirement plan. To stay on track, Raj's TFSA (with a current balance of
$10,000) will need to be worth $42,000 in five years. Raj is able to contribute his annual bonus of $5,000 at the end of each year. For Raj to stay on plan, what rate of return does Lois need to be targeting?

Answer: B

Explanation:
Lois must solve for the annual rate of return that grows Raj's TFSA from $10,000 today to $42,000 in five years while adding $5,000 at each year-end. The future value equation includes both the compounded current balance and the future value of the annual contributions. Solving $10,000(1+r)