FP1 / FULL PRACTICE EXAM
A client suggests that she could choose to use her $5,000 tax refund this 12 months to pay
down her loan in place of contributing to an RESP for her daughter. Choose the financial
planning goal-setting hobby that she is performing.
A. Defining by way of time frame.
B. Specific and measurable.
C. Acceptable in degree of hazard.
D. Ordered in stage of significance. - ANS-D. Ordered in degree of importance.
General Feedback: Because sources are generally limited, your customers must prioritize
their goals and cognizance on accomplishing the most vital first. Reference: Module 1,
Section 2.
Score
A couple wishes to maximise their savings in a tax-powerful way for his or her five-yr vintage
toddler's put up-secondary education. They wish to ensure that the budget accumulated may
be used for educational functions most effective. Select the only investment structure for
their aim.
A. An RRSP.
B. An RESP.
C. An in-consider account.
D. A Tax-Free Savings Account. - ANS-B. An RESP.
General Feedback:
An RESP is the maximum appropriate desire for their aim. It will permit them to maximise
their savings for his or her infant's training because of the CESG provide, and the structure
of the plan is such that it ought to be used for put up-secondary educational purposes best.
Ali, an consultant, is meeting with Mr. And Mrs. Shafei to discuss property making plans
problems. Ali asks the Shafeis to give him a list in their property, names of beneficiaries, and
number one commands in their strength of legal professional documents and wills. Which of
the following pieces of information would Ali most likely ask for subsequent?
A. The form of investments they are cozy with.
B. Their investment time horizon.
C. The names beneath which ownership in their assets is held.
D. Their need for earnings or boom. - ANS-C. The names beneath which possession of their
assets is held.
General Feedback:
,Ali will maximum possibly ask for the names below which possession of the Shafeis's
property is held as at the same time held property is handled in another way for probate and
different purposes. Asking about investments or their need for earnings or growth could be
secondary in an property planning dialogue. Finding out the bodily location in their will and
POA isn't always that vital on account that Ali has already asked for the number one
commands contained in the ones files.Reference: Module 3, Section 5.
Andrew meets with his marketing consultant and asks for facts on a TFSA. Andrew is
eighteen years antique, a resident of the United States and a student at Sheridan College in
Toronto, Ontario. Until he graduates in 3 years, his earned income might be approximately
$7,000 according to year. Select the precise statements.
[1] This year, the amount of Andrew's new TFSA contribution room would be $1,260.
[2] To collect new TFSA contribution room, Andrew could must be as a minimum 21 years of
age.
[3] If Andrew have been to make a TFSA contribution, he could be concern to a tax of 1% in
keeping with month.
[4] To collect new TFSA contribution room, Andrew could must be resident in Canada.
A. I and II simplest.
B. I and IIII simplest.
C. II and III simplest.
D. III and IV handiest. - ANS-D. III and IV most effective.
General Feedback:
Andrew isn't a resident of Canada. Any resident of Canada who's at least 18 years of age
can open a TFSA. Contributions are limited to $5,000 a 12 months (as of 2009) and indexed
to inflation. Over-contribution could be taxed at the fee of one% of the excess contribution
quantity each month. Reference: Module 3, Section 2.
At the federal stage, while multiple man or woman supports a infant, who can claim the
childcare expense deduction?
A. The decrease earnings earner must claim the deduction, issue to some exceptions.
B. The lower income earner have to constantly declare the deduction, and not using a
exception.
C. The higher earnings earner should always declare the deduction, with no exception.
D. The deduction can be split among the two assisting individuals. - ANS-A. The lower
income earner ought to claim the deduction, situation to a few exceptions.
General Feedback:
If multiple person helps the kid, the deduction have to be claimed by using the individual with
the decrease quantity of internet profits, concern to a few exceptions. Reference: Module
three, Section 1.
Bob earns $500 in dividends from his $five,000 common percentage investment that he
invested in rather than a $five,000 bond funding that might have earned him $750. Calculate
the monetary price of Bob's percentage investment.
A. $250.
B. $4,500.
, C. $five,000.
D. $5,250. - ANS-C. $5,000.
General Feedback:
The economic fee of his funding is the greenback quantity that represents the investor's
preliminary funding into the asset. Thus, Bob's financial cost is $5,000. Reference: Module 3,
Section 2.
By and large, what statement below is real in regards to the present day landscape in
Canada for monetary advisors?
A. There has been a dramatic shift to rate based advice because it's perceived as
independent.
B. The position has shifted to a patron driven model in which constructing a sturdy client
courting is key.
C. The commercial enterprise is now product pushed in which it's all about promoting better
commissioned merchandise.
D. The enterprise is focusing on reducing expenses and locating the cheapest investments
for customers. - ANS-B. The position has shifted to a patron driven model in which building a
robust purchaser dating is fundamental.
The position of the Advisor within the monetary offerings enterprise has changed in recent
years from one this is product driven to one that is consumer pushed. Reference: Module 1,
Section 1
Calculate the accounting charge of go back on a inventory buy of $5,250 this is offered at
the give up of twelve months for a benefit of $375. Round your answer to 2 decimal
locations.
A. 6.38%.
B. 7.14%.
C. 7.69%.
D. Nine.30%. - ANS-B. 7.14%
General Feedback:
The accounting charge of return is calculated as (net benefit or loss)/Initial investment x 100.
Therefore, in this case, the return could be calculated as $375/five,250x100=7.14%.
Reference: Module three, Section 2.
Calculate this family's Gross Debt Service Ratio (GDSR) given the subsequent facts.
Annual family profits (gross quantity): $one hundred,000
Monthly mortgage bills: $2,000
Annual assets taxes: $5,000
Annual heating charges: $1,440
Total credit card balances exquisite: $20,000.
A. Eight%.
B. 30%.
C. 20%.
D. 50% - ANS-B. 30%.
A client suggests that she could choose to use her $5,000 tax refund this 12 months to pay
down her loan in place of contributing to an RESP for her daughter. Choose the financial
planning goal-setting hobby that she is performing.
A. Defining by way of time frame.
B. Specific and measurable.
C. Acceptable in degree of hazard.
D. Ordered in stage of significance. - ANS-D. Ordered in degree of importance.
General Feedback: Because sources are generally limited, your customers must prioritize
their goals and cognizance on accomplishing the most vital first. Reference: Module 1,
Section 2.
Score
A couple wishes to maximise their savings in a tax-powerful way for his or her five-yr vintage
toddler's put up-secondary education. They wish to ensure that the budget accumulated may
be used for educational functions most effective. Select the only investment structure for
their aim.
A. An RRSP.
B. An RESP.
C. An in-consider account.
D. A Tax-Free Savings Account. - ANS-B. An RESP.
General Feedback:
An RESP is the maximum appropriate desire for their aim. It will permit them to maximise
their savings for his or her infant's training because of the CESG provide, and the structure
of the plan is such that it ought to be used for put up-secondary educational purposes best.
Ali, an consultant, is meeting with Mr. And Mrs. Shafei to discuss property making plans
problems. Ali asks the Shafeis to give him a list in their property, names of beneficiaries, and
number one commands in their strength of legal professional documents and wills. Which of
the following pieces of information would Ali most likely ask for subsequent?
A. The form of investments they are cozy with.
B. Their investment time horizon.
C. The names beneath which ownership in their assets is held.
D. Their need for earnings or boom. - ANS-C. The names beneath which possession of their
assets is held.
General Feedback:
,Ali will maximum possibly ask for the names below which possession of the Shafeis's
property is held as at the same time held property is handled in another way for probate and
different purposes. Asking about investments or their need for earnings or growth could be
secondary in an property planning dialogue. Finding out the bodily location in their will and
POA isn't always that vital on account that Ali has already asked for the number one
commands contained in the ones files.Reference: Module 3, Section 5.
Andrew meets with his marketing consultant and asks for facts on a TFSA. Andrew is
eighteen years antique, a resident of the United States and a student at Sheridan College in
Toronto, Ontario. Until he graduates in 3 years, his earned income might be approximately
$7,000 according to year. Select the precise statements.
[1] This year, the amount of Andrew's new TFSA contribution room would be $1,260.
[2] To collect new TFSA contribution room, Andrew could must be as a minimum 21 years of
age.
[3] If Andrew have been to make a TFSA contribution, he could be concern to a tax of 1% in
keeping with month.
[4] To collect new TFSA contribution room, Andrew could must be resident in Canada.
A. I and II simplest.
B. I and IIII simplest.
C. II and III simplest.
D. III and IV handiest. - ANS-D. III and IV most effective.
General Feedback:
Andrew isn't a resident of Canada. Any resident of Canada who's at least 18 years of age
can open a TFSA. Contributions are limited to $5,000 a 12 months (as of 2009) and indexed
to inflation. Over-contribution could be taxed at the fee of one% of the excess contribution
quantity each month. Reference: Module 3, Section 2.
At the federal stage, while multiple man or woman supports a infant, who can claim the
childcare expense deduction?
A. The decrease earnings earner must claim the deduction, issue to some exceptions.
B. The lower income earner have to constantly declare the deduction, and not using a
exception.
C. The higher earnings earner should always declare the deduction, with no exception.
D. The deduction can be split among the two assisting individuals. - ANS-A. The lower
income earner ought to claim the deduction, situation to a few exceptions.
General Feedback:
If multiple person helps the kid, the deduction have to be claimed by using the individual with
the decrease quantity of internet profits, concern to a few exceptions. Reference: Module
three, Section 1.
Bob earns $500 in dividends from his $five,000 common percentage investment that he
invested in rather than a $five,000 bond funding that might have earned him $750. Calculate
the monetary price of Bob's percentage investment.
A. $250.
B. $4,500.
, C. $five,000.
D. $5,250. - ANS-C. $5,000.
General Feedback:
The economic fee of his funding is the greenback quantity that represents the investor's
preliminary funding into the asset. Thus, Bob's financial cost is $5,000. Reference: Module 3,
Section 2.
By and large, what statement below is real in regards to the present day landscape in
Canada for monetary advisors?
A. There has been a dramatic shift to rate based advice because it's perceived as
independent.
B. The position has shifted to a patron driven model in which constructing a sturdy client
courting is key.
C. The commercial enterprise is now product pushed in which it's all about promoting better
commissioned merchandise.
D. The enterprise is focusing on reducing expenses and locating the cheapest investments
for customers. - ANS-B. The position has shifted to a patron driven model in which building a
robust purchaser dating is fundamental.
The position of the Advisor within the monetary offerings enterprise has changed in recent
years from one this is product driven to one that is consumer pushed. Reference: Module 1,
Section 1
Calculate the accounting charge of go back on a inventory buy of $5,250 this is offered at
the give up of twelve months for a benefit of $375. Round your answer to 2 decimal
locations.
A. 6.38%.
B. 7.14%.
C. 7.69%.
D. Nine.30%. - ANS-B. 7.14%
General Feedback:
The accounting charge of return is calculated as (net benefit or loss)/Initial investment x 100.
Therefore, in this case, the return could be calculated as $375/five,250x100=7.14%.
Reference: Module three, Section 2.
Calculate this family's Gross Debt Service Ratio (GDSR) given the subsequent facts.
Annual family profits (gross quantity): $one hundred,000
Monthly mortgage bills: $2,000
Annual assets taxes: $5,000
Annual heating charges: $1,440
Total credit card balances exquisite: $20,000.
A. Eight%.
B. 30%.
C. 20%.
D. 50% - ANS-B. 30%.
