The following table outlines details for a life insurance policy issued in 1995:
Details
Amounts
Cash surrender value
$8,000
Premiums paid
$6,000
Dividends declared
$1,500
Net cost of pure insurance
$750
Marginal tax rate
30%
Assuming the policy is completely surrendered, what are the taxes payable?

• A. $1,275.
• B. $2,750.
• C. $4,250.
• D. $825.

Paul has recently been promoted at work, and is looking to pay down his debts. Paul has the following obligations:
Type
Interest rate (%)
Amortization (years)
Mortgage
3.95
22
Registered Retirement Savings Plan (RRSP) line of credit
6.00
N/A
Consolidation loan
8.95
3
Credit card
15.00
N/A
Which debt should Paul pay down last?

• A. Mortgage.
• B. RRSP line of credit.
• C. Credit card.
• D. Consolidation loan.

Diana has begun receiving spousal support payments and child support payments from her ex-husband Bruce.
What tax planning issue should be of greatest concern to Diana?

• A. The tax deductibility of spousal support payments.
• B. The tax deductibility of child support payments.
• C. The tax payable on spousal support payments.
• D. The tax payable on child support payments.

In order to complete the analysis and development of a financial plan, an advisor receives a client's investment statements and tax returns. From the perspective of principle six (code of ethics), what action should the advisor take in order to maintain a relationship of trust and confidence?

• A. Making product suggestions that strictly benefit the client's overall financial positioning.
• B. Using the data to investigate products before making a recommendation.
• C. Securing the documents to be used by authorized personnel only.
• D. Referring the client for needs to other professionals within the advisor's network.

Hannah would like to replace her current vehicle and is considering leasing instead of financing. Hannah commutes a considerable distance from outside the city each day for her work. She thinks leasing would allow her to always have a newer and more reliable vehicle. What is an important factor for Hannah to consider before making her decision?

• A. Mileage limits may add extra costs for her at the end of the lease.
• B. The payments would be higher relative to financing.
• C. The lease company covers all scheduled maintenance reducing her costs.
• D. She would require a larger down payment than if financing.