FP1 / FULL PRACTICE EXAM NEWEST 2025/2026 ACTUAL
COMPLETE REAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+.
Henry, age 45, contributes $7,000 annually to his RRSP which is
60% invested in equity mutual funds and 40% in fixed-income
products. He is planning to retire at age 60. Which tax planning
techniques is Henry using?
A. Trading across taxpayers.
B. Trading across investment vehicles.
C. Trading over time.
D. Trading over organizational forms. - ANSWER-C. Trading over
time.
Henry is deferring the payment of income tax on funds held in
his RRSP for at least 15 years until his retirement at age 60.
Henry is using the "trading over time" technique. Reference:
Module 3, Section 1.
Shabhana and Ravi are 58 and 67 years old respectively and
have been married for 35 years. They have a condo in the city
,and a cottage by a lake, both jointly held. They have only one
child, Sachin, who is 32 years old and will eventually inherit their
entire estate. The cottage's value has gone up substantially
since they purchased it. Shabhana and Ravi want to obtain life
insurance so that Ravi has a lump sum available when capital
gains taxes become payable on the cottage. Which of the
following life insurance policies would be most suitable in their
situation?
A. A joint life first-to-die policy.
B. A separate policy on Ravi's life and on Shabhana's life.
C. A policy on Shabhana's life only.
D. A joint life last-to-die policy. - ANSWER-D. A joint life last-to-
die policy.
General Feedback:
The tax liability will arise on the second death and therefore a
joint life last-to-die policy will be ideal in their situation. A
separate policy on their individual lives would be more
expensive. Reference: Module 3, Section 5.
Gareth dies leaving a small estate of $25,000 in savings
accounts to his wife Margot. What is the most cost-effective
document for his beneficiary Margot, the executor of his estate,
to use to obtain the funds?
,A. Letters Probate.
B. Affidavit of Execution of the Will.
C. Affidavit of Value of the Estate.
D. Letter of Indemnity. - ANSWER-D. Letter of Indemnity.
General Feedback:
If the amounts involved are relatively small, under $30,000 for
example, a financial institution may be willing to accept a letter
of indemnity or a probate bond from the executor in lieu of
Letters Probate. This avoids the cost of probate for the estate.
Reference: Module 3, Section 5.
Choose the document that can be prepared at the time of
signing a will that will help prevent later problems in verifying
the validity of the will.
A. Letters Probate.
B. Notarial Will.
C. Codicil.
D. Affidavit of Execution. - ANSWER-D. Affidavit of Execution.
General Feedback:
, With an affidavit of execution, the court can usually be satisfied
that the will was properly signed and that the formalities of
execution were all observed. An affidavit prepared while the
witnesses are readily available averts later problems in proving
the validity of the will, especially in cases where the witnesses
might be difficult to locate at a much later date when the testator
dies. Reference: Module 3, Section 5.
Gary has specific wishes regarding health care in the instance of
severe injury. He is concerned that these will be followed.
Indicate what his advisor could recommend to Gary to help him
to achieve this goal.
A. Power of Attorney.
B. Living will.
C. Contingent Power of Attorney.
D. Advanced Care Directive. - ANSWER-D. Advanced Care
Directive.
General Feedback:
An advance care directive or advance healthcare directive is a
form of legal document by which a person seeks to consent to,
or refuse, medical care or treatment in advance of need.
Reference: Module 3, Section 5.
COMPLETE REAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+.
Henry, age 45, contributes $7,000 annually to his RRSP which is
60% invested in equity mutual funds and 40% in fixed-income
products. He is planning to retire at age 60. Which tax planning
techniques is Henry using?
A. Trading across taxpayers.
B. Trading across investment vehicles.
C. Trading over time.
D. Trading over organizational forms. - ANSWER-C. Trading over
time.
Henry is deferring the payment of income tax on funds held in
his RRSP for at least 15 years until his retirement at age 60.
Henry is using the "trading over time" technique. Reference:
Module 3, Section 1.
Shabhana and Ravi are 58 and 67 years old respectively and
have been married for 35 years. They have a condo in the city
,and a cottage by a lake, both jointly held. They have only one
child, Sachin, who is 32 years old and will eventually inherit their
entire estate. The cottage's value has gone up substantially
since they purchased it. Shabhana and Ravi want to obtain life
insurance so that Ravi has a lump sum available when capital
gains taxes become payable on the cottage. Which of the
following life insurance policies would be most suitable in their
situation?
A. A joint life first-to-die policy.
B. A separate policy on Ravi's life and on Shabhana's life.
C. A policy on Shabhana's life only.
D. A joint life last-to-die policy. - ANSWER-D. A joint life last-to-
die policy.
General Feedback:
The tax liability will arise on the second death and therefore a
joint life last-to-die policy will be ideal in their situation. A
separate policy on their individual lives would be more
expensive. Reference: Module 3, Section 5.
Gareth dies leaving a small estate of $25,000 in savings
accounts to his wife Margot. What is the most cost-effective
document for his beneficiary Margot, the executor of his estate,
to use to obtain the funds?
,A. Letters Probate.
B. Affidavit of Execution of the Will.
C. Affidavit of Value of the Estate.
D. Letter of Indemnity. - ANSWER-D. Letter of Indemnity.
General Feedback:
If the amounts involved are relatively small, under $30,000 for
example, a financial institution may be willing to accept a letter
of indemnity or a probate bond from the executor in lieu of
Letters Probate. This avoids the cost of probate for the estate.
Reference: Module 3, Section 5.
Choose the document that can be prepared at the time of
signing a will that will help prevent later problems in verifying
the validity of the will.
A. Letters Probate.
B. Notarial Will.
C. Codicil.
D. Affidavit of Execution. - ANSWER-D. Affidavit of Execution.
General Feedback:
, With an affidavit of execution, the court can usually be satisfied
that the will was properly signed and that the formalities of
execution were all observed. An affidavit prepared while the
witnesses are readily available averts later problems in proving
the validity of the will, especially in cases where the witnesses
might be difficult to locate at a much later date when the testator
dies. Reference: Module 3, Section 5.
Gary has specific wishes regarding health care in the instance of
severe injury. He is concerned that these will be followed.
Indicate what his advisor could recommend to Gary to help him
to achieve this goal.
A. Power of Attorney.
B. Living will.
C. Contingent Power of Attorney.
D. Advanced Care Directive. - ANSWER-D. Advanced Care
Directive.
General Feedback:
An advance care directive or advance healthcare directive is a
form of legal document by which a person seeks to consent to,
or refuse, medical care or treatment in advance of need.
Reference: Module 3, Section 5.
