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Alexis has an index-linked GIC with an adjusted cost base of $20,500. The GIC was issued one year ago, has four years remaining to maturity and provides her with 60% participation in the gains of the S & P/TSX 60 Index, based on the level of the Index at maturity or at redemption prior to maturity. The GIC has a 2% fee if redeemed in the first two years. Alexis notices that the S & P/TSX 60 Index is up 25% and she would like to redeem her GIC. She asked her financial planner if she redeems her GIC, how much she would receive upon redemption. What will her financial planner tell her?

• A. She will receive $20,500.
• B. She will receive $25,625.
• C. She will receive $23,104.
• D. She will receive $23,575.

Kendrick, age 55, owns a successful small business, ZXC Inc., valued at $800,000. Kendrick has extensive savings outside of the business and would like to pass the company onto his son at some point in the future.
Kendrick expects the business to increase in value $25,000 per year. If Kendrick decides to use an estate freeze to reduce the amount of taxes he will be required to pay, his financial planner should recommend that he implement the estate freeze at which point in relation to gifting the business to his son?

• A. Immediately.
• B. At the same time as gifting the company.
• C. One month prior to gifting the company.
• D. To take effect at the time of his passing.

Ram Patel, age 65, is meeting with his financial planner, Maria Romano, to complete a financial plan. Ram is retiring this year, and his company provides a defined benefit pension plan. Upon retirement, he has the choice of receiving $20,000 each year for 20 years or until death (whichever is earlier), or he can take
$304,300, which is the commuted value at retirement. Ram has confirmed that he will be transferring the commuted value to a LIRA. After further discovery, Maria suggests that they utilize a 5% market rate of return and project the funds to last 25 years. What should Maria update Ram's projected annual retirement income to?

• A. $21,000.
• B. $24,418.
• C. $21,591.
• D. $20,000.

Lex's client, Phillip, has signed an agreement to purchase his uncle's business when his uncle retires in five years for $210,000. Phillip has $175,000 today, how should Lex recommend Philip invest his money?

• A. Phillip should purchase an equity mutual fund which has had an average return of 6.00% a year for the past five years.
• B. Phillip should deposit the funds into a savings account which is currently paying 3.00% per year.
• C. Phillip should purchase a 5-year bond with a rate of 3.75%.
• D. Phillip should purchase a 5-year 3.50% annual GIC.

A financial planner, Rachel, is preparing to recommend a discretionary portfolio manager to her client. The portfolio manager is owned by Rachel's former employer, and Rachel receives no referral fee. However, the former employer regularly sends new clients to Rachel's practice. What should Rachel do before making the recommendation?

• A. Disclose the relationship and the potential conflict before the client decides.
• B. Avoid discussing the portfolio manager and let the client find one independently.
• C. Proceed because no monetary referral fee is paid.
• D. Recommend the manager only if the client signs a risk acknowledgement form.