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Exam Code: AFP-Exam-1 Vendor: CSI Name: Applied Financial Planning Certification Exam 1 (AFP) 117 Q&A with Explanation Last Update: Jul 16, 2026
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AFP-Exam-1 Q&A's Detail

Exam Code:
AFP-Exam-1
Total Questions:
117 Q&A's
Single Choice Questions:
117 Q&A's

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Applied Financial Planning Certification Exam 1 (AFP) Questions and Answers

Question 1

Jonathan owns a medium size consulting firm and earns an average annual income of $150,000. He is reviewing his retirement plan with his financial planner. Jonathan asked his planner about retirement compensation arrangement and how this may benefit him. What should his financial planner tell him?

Options:

A.

It is exempt from regulatory limits and withdrawals are tax-exempt for the executive.

B.

It leaves RRSP contribution room unaffected and is exempt from regulatory limits.

C.

It results in a pension adjustment and withdrawals are tax-exempt for the recipient.

D.

It reduces RRSP contribution room but is exempt from regulatory limits.

Question 2

Alexander and Irena, age 30 and 32 respectively, are married and have been working full-time for one year. They have a daughter, age 3, and are expecting their second child. They recently bought a home with a mortgage balance of $390,000 at 4% amortized over 25 years. Their financial planner is trying to determine their tolerance for risk. After completing the life-cycle analysis, how can their financial planner explain the stage in which the couple finds themselves and the risk tolerance associated with it?

Options:

A.

They are at the consolidation stage where they can tolerate moderate to high level of risk.

B.

They are at the accumulation stage where they can tolerate a high level of risk.

C.

They are at the financial independence stage where their tolerance of risk is low.

D.

They are at the gifting stage where their tolerance of risk is low.

Question 3

Bill was recently declined for a loan application at his financial institution, and he is concerned that a liability has been added to his credit bureau that does not belong to him. He asks his financial planner to review his credit bureau with him to help him identify why he may have been declined. Which area of the credit bureau might his financial planner advise Bill to review?

Options:

A.

Number of previous declines.

B.

Inquiries.

C.

Account history.

D.

Public record information.

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