CSI AFP-Exam-1 : Applied Financial Planning Certification Exam 1 (AFP)

AFP-Exam-1 real exams

Exam Code: AFP-Exam-1

Exam Name: Applied Financial Planning Certification Exam 1 (AFP)

Updated: Sep 16, 2026

Q & A: 120 Questions and Answers

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CSI AFP-Exam-1 Exam Syllabus Topics:

SectionObjectives
Investment Planning- Asset allocation and portfolio basics
- Investment products and risk-return profiles
Financial Planning Foundations- Financial planning process and client relationship management
- Ethics and professional standards in financial advising
Taxation Concepts- Personal income tax principles
- Tax-efficient investment strategies
Retirement Planning- Retirement savings vehicles and planning principles
Insurance and Risk Management- Life and health insurance fundamentals
- Risk mitigation strategies in financial planning

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

Question #1

Interest rates are expected to rise sharply. Which fixed-income security would normally have the highest price sensitivity to that change, all else equal?

  • A. Twenty-year zero-coupon bond.
  • B. Floating-rate note.
  • C. Six-month treasury bill.
  • D. High-interest savings account.
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #2

Derek recently inherited $900,000. He asks his financial planner to invest the entire amount in a concentrated portfolio of junior mining stocks. Derek has never invested before, has two young children, and is still deciding whether to purchase a home. What should the planner do first?

  • A. Refuse to work with Derek because he suggested a speculative portfolio.
  • B. Place the trades because Derek has given clear instructions.
  • C. Review Derek's objectives, risk tolerance, risk capacity, time horizon, and liquidity needs.
  • D. Invest half immediately and hold half in cash without further discussion.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #3

Dianna is visiting with Karen, her Financial Planner, and is excited to report that she has just bought her dream home. She has also let Karen know she Is meeting with an insurance representative to purchase a whole life insurance to cover her 20-year mortgage. Why might Karen suggest Dianna consider term life insurance instead?

  • A. The term policy has a cash value, which can be borrowed against.
  • B. It is better suited for long term insurance needs.
  • C. The client's health may deteriorate as she gets older.
  • D. The cost of premiums is lower than whole life.
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

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Question #4

A client asks when his RRSP must generally be converted to a retirement income vehicle. What should the planner explain?

  • A. On the day he turns 65.
  • B. By the end of the year he turns 71.
  • C. Only when he stops working.
  • D. Only after all RRSP assets are withdrawn in cash.
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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Question #5

Tom has two children from a previous marriage. He has been paying $1,000 per month for spousal support and $1,500 per month for child support to his ex-wife. Recently, his ex-wife was awarded increased child support payments from Tom to cover unanticipated university expenses for one of the children. What should Tom's financial planner advise him about how this increased monthly payment may impact his finances?

  • A. Net cash flow will be reduced equal to the full amount of the extra child support payments.
  • B. The tuition tax credit for his child's post-secondary education will be applied towards Tom's taxes.
  • C. The increased amount Tom pays in child support will result in a larger tax credit at the end of the year.
  • D. Net cash flow will be reduced equal to the amount of the extra child support payments, less the tax deduction.
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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