FP1 FULL PRACTICE EXAM | NEWEST
ACTUAL EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | 100% PASS | 2025 UPDATE!
Indicate the type of risk that would be exemplified by a country's
implementation of expropriating natural resource assets.
A. Market risk
B. Political risk
C. Credit risk
D. Purchasing power risk - ✔✔✔ Correct Answer > B. Political risk
General Feedback:
In most cases, political risk takes the form of government regulation or
deregulation but nationalization or expropriation cannot be ruled out
entirely. Government regulation has always been a potential economic
reality and has become increasingly important in determining business
profitability. Reference: Module 3, Section 2.
Which statement is true regarding the Lifelong Learning Plan?
,A. Students in part-time training and their spouses are allowed to
withdraw $10,000 per year from their Registered Retirement Savings
Plan (RRSP).
B. Withdrawn amounts must be repaid to an RRSP in equal installments
over a 5-year period.
C. The first repayment will be due no later than 60 days after the 5th
year following the first withdrawal.
D. An eligible student is allowed to withdraw funds from their RRSP
over a 10-year period as long as the total amount does not exceed
$40,000. - ✔✔✔ Correct Answer > C. The first repayment will be due
no later than 60 days after the 5th year following the first withdrawal.
General Feedback:
The annuitant or the spouse or partner must be in enrolled in full-time
training or postsecondary education, not part-time. Up to $10,000 a
year can be withdrawn over a 4 year period, not a 10 year period.
Amounts withdrawn must be repaid to the RRSP in installments over 10
years not 5 years. Reference: Module 3 - Section 3.
Melissa Ahmad plans to make the following contributions into the
Registered Educational Savings Plan (RESP) of her newborn daughter
over the next three years: $750, $1,500, and $2,125. Calculate her
cumulative CESG carry forward available at the end of the 3 years.
A. $375
B. $1,625.
,C. $2,750.
D. $3,125. - ✔✔✔ Correct Answer > D. $3,125.
General Feedback:
The calculation is = ($2,500 - $750) + ($2,500 - $1,500) + ($2,500 -
$2,125) = $3,125. Reference: Module 3, Section 2.
Select the type of risk that SAG Co. encounters by using only common
stock to finance its growth and acquisitions.
A. Business Risk.
B. Financial Risk.
C. Market Risk.
D. Systematic Risk. - ✔✔✔ Correct Answer > A. Business Risk.
General Feedback:
A company that strictly uses common stock for financing incurs only
business risk, which is the uncertainty associated with return on
business investments. Reference: Module 3, Section 2.
Calculate the accounting rate of return on a stock purchase of $5,250
that is sold at the end of one year for a gain of $375. Round your
answer to 2 decimal places.
, A. 6.38%.
B. 7.14%.
C. 7.69%.
D. 9.30%. - ✔✔✔ Correct Answer > B. 7.14%
General Feedback:
The accounting rate of return is calculated as (net gain or loss)/Initial
investment x 100. Therefore, in this case, the return would be
calculated as $375/5,250x100=7.14%. Reference: Module 3, Section 2.
It is December 31, 2015. Scott, a 45-year old Canadian resident has a
Tax-Free Savings Account (TFSA). The fair market value of the TFSA is
$45,000. Scott's unused TFSA contribution room at the end of last year
was $12,000. Last year, Scott took a distribution from his TFSA of
$4,000. Assume that for that year, the TFSA contribution limit is still
$5,000. This year, Scott has not made any TFSA contributions. Calculate
Scott's unused TFSA contribution room.
A. $16,000
B. $18,500
C. $21,000
D. $24,500 - ✔✔✔ Correct Answer > C. $21,000
General Feedback:
ACTUAL EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | 100% PASS | 2025 UPDATE!
Indicate the type of risk that would be exemplified by a country's
implementation of expropriating natural resource assets.
A. Market risk
B. Political risk
C. Credit risk
D. Purchasing power risk - ✔✔✔ Correct Answer > B. Political risk
General Feedback:
In most cases, political risk takes the form of government regulation or
deregulation but nationalization or expropriation cannot be ruled out
entirely. Government regulation has always been a potential economic
reality and has become increasingly important in determining business
profitability. Reference: Module 3, Section 2.
Which statement is true regarding the Lifelong Learning Plan?
,A. Students in part-time training and their spouses are allowed to
withdraw $10,000 per year from their Registered Retirement Savings
Plan (RRSP).
B. Withdrawn amounts must be repaid to an RRSP in equal installments
over a 5-year period.
C. The first repayment will be due no later than 60 days after the 5th
year following the first withdrawal.
D. An eligible student is allowed to withdraw funds from their RRSP
over a 10-year period as long as the total amount does not exceed
$40,000. - ✔✔✔ Correct Answer > C. The first repayment will be due
no later than 60 days after the 5th year following the first withdrawal.
General Feedback:
The annuitant or the spouse or partner must be in enrolled in full-time
training or postsecondary education, not part-time. Up to $10,000 a
year can be withdrawn over a 4 year period, not a 10 year period.
Amounts withdrawn must be repaid to the RRSP in installments over 10
years not 5 years. Reference: Module 3 - Section 3.
Melissa Ahmad plans to make the following contributions into the
Registered Educational Savings Plan (RESP) of her newborn daughter
over the next three years: $750, $1,500, and $2,125. Calculate her
cumulative CESG carry forward available at the end of the 3 years.
A. $375
B. $1,625.
,C. $2,750.
D. $3,125. - ✔✔✔ Correct Answer > D. $3,125.
General Feedback:
The calculation is = ($2,500 - $750) + ($2,500 - $1,500) + ($2,500 -
$2,125) = $3,125. Reference: Module 3, Section 2.
Select the type of risk that SAG Co. encounters by using only common
stock to finance its growth and acquisitions.
A. Business Risk.
B. Financial Risk.
C. Market Risk.
D. Systematic Risk. - ✔✔✔ Correct Answer > A. Business Risk.
General Feedback:
A company that strictly uses common stock for financing incurs only
business risk, which is the uncertainty associated with return on
business investments. Reference: Module 3, Section 2.
Calculate the accounting rate of return on a stock purchase of $5,250
that is sold at the end of one year for a gain of $375. Round your
answer to 2 decimal places.
, A. 6.38%.
B. 7.14%.
C. 7.69%.
D. 9.30%. - ✔✔✔ Correct Answer > B. 7.14%
General Feedback:
The accounting rate of return is calculated as (net gain or loss)/Initial
investment x 100. Therefore, in this case, the return would be
calculated as $375/5,250x100=7.14%. Reference: Module 3, Section 2.
It is December 31, 2015. Scott, a 45-year old Canadian resident has a
Tax-Free Savings Account (TFSA). The fair market value of the TFSA is
$45,000. Scott's unused TFSA contribution room at the end of last year
was $12,000. Last year, Scott took a distribution from his TFSA of
$4,000. Assume that for that year, the TFSA contribution limit is still
$5,000. This year, Scott has not made any TFSA contributions. Calculate
Scott's unused TFSA contribution room.
A. $16,000
B. $18,500
C. $21,000
D. $24,500 - ✔✔✔ Correct Answer > C. $21,000
General Feedback:
