Real Estate Study Questions

2245 Words Mar 16th, 2015 9 Pages
Chapter 1
1. The most probable price which a property will bring in a competitive and open market under all conditions requisite to a fair sale is:
a. transaction price.
b. most probable selling price.
c. market value.
d. investment value.
2. Investment value:
a. is an objective estimate of a property’s worth as an investment.
b. is the value of the property as an investment, and therefore is also the most probable selling price.
c. from the present owner’s perspective sets the upper end of the range of possible transaction prices.
d. is unique to the individual investor and need not be closely related to market value or most probable selling price.
3. The term market value, as generally employed by appraisers, means:
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All of the above
6. When considering a real estate investment opportunity, which of the following issues need to be addressed?
a. Estimates of total costs and benefits
b. The style of the architecture of the building
c. The timing of disbursements and receipts
d. (a) and (c) above
7. Cash flows for real estate investments may come from:
a. rental.
b. refinancing.
c. tax savings.
d. all of the above.
8. Rational real estate investment decisions require:
a. a coupling of estimated costs and benefits with a forecast of the timing of disbursements and receipts.
b. choosing between uncertain costs and certain present benefits.
c. a methodology for ranking attainable combinations by their variety.
d. computer expertise.
9. Active investors (as opposed to passive investors):
a. invest primarily in debt instruments.
b. invest primarily in equities.
c. are more interested in primary than secondary markets.
d. make decisions that affect the profitability of the property’s operations.
10. Equity investors:
a. are always active in the sense that they make decisions which affect the profitability of the property’s operations.
b. are always passive in the sense that they make no decisions which affect the profitability of the property’s operations.
c. always take an ownership interest in debt instruments.
d. may be either active or passive investors.
11. State-of-the-art real estate investment analysis treats real estate as:

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