112

Question 1

The appraisal process is a ____ logical method of collecting, analyzing, and processing data into value estimates

Answer 1

systematic

Question 2

Definition of the problem is the ___ step in the appraisal process

Answer 2

1st

Question 3

The ____ of an appraisal is usually to estimate an opinion of a type of value, most often ___ value

Answer 3

purpose, market

Question 4

The type and extent of research and analyses in an appraisal or review assignment is referred to as the ___________

Answer 4

scope of work

Question 5

In order to determine the appropriate scope of work an appraiser must properly ______ to be solved

Answer 5

identify the problem

Question 6

4 tests of HBU

Answer 6

legally permissable
physically possible
financially feasible
maximum productivity

Question 7

Results of deducting expected vacancy and collection losses from PGI, then adding misc income

Answer 7

Effective Gross income

Question 8

Which capitalization method/s use the IRV equation?
A direct cap
B yield cap
C both
D neither

Answer 8

C

Question 9

Investment Criteria includes all but:
A Profit
B Risk
C Supplies
D Illiquidity

Answer 9

C

Question 10

Investors are looking for a return ___ and a return ___ their capital

Answer 10

of, on

Question 11

Which of the following is not a return on rate?
A interest rate
B discount rate
C yield rate
D recapture rate

Answer 11

D

Question 12

The principle of anticipation states that value is the present worth of all ______ future benefits derived from a property

Answer 12

anticipated

Question 13

Leverage is the borrowing of funds in anticipation of earning a ____ return than the cost of the borrowed funds.

Answer 13

greater

Question 14

Leverage can be all but:
A positive
B prevailing
C negative
D neutral

Answer 14

B

Question 15

If the overall cap rate is 8%, mortgage constant is 7% and equity cap rate is 11%, leverage is:
A positive
B negative
C neutral
D prevailing

Answer 15

A

Question 16

The normal interest rate is the same as the effective rate only when there is ___ compounding

Answer 16

annual

Question 17

What is the FW of 1 factor for 5 years at an interest rate of 10% compounded annually?

Answer 17

1.610510

Question 18

What is the present value of 5000 that will be received in 10 years assuming 6% interest compounded annually?

Answer 18

$2792

Question 19

An investor will need 15,000 to replace the roof in 6 years. If he can earn 3% on his money compounded annualy, how much must he put away each year?

Answer 19

$2319

Question 20

A buyer would like to borrow 100,000. If interest rates are 6% compounded monthly and a loan term of 15 years can be attained, what will the monthly payments be?

Answer 20

843.86

Question 21

The yield on a loan at 8% compounded monthly is greater than the yield of an 8% loan compounded annually: T or F

Answer 21

T

Question 22

The effect of lesser fee simple rights had on the sale price should be considered:
A In all cases with jurisdiction
B Never
C Only if value is higher
D Only Retail properties

Answer 22

A

Question 23

An expense ____ is a clause that limits a tenants portion of operating expenses to a certain amount

Answer 23

cap

Question 24

An expense ____ is a clause that limits the landlords obligation to pay expenses to a certain amount

Answer 24

stop

Question 25

``` Property is advertised for rent at $20/sqft annually. The owner offers to enter into a 5 yr lease that provides free rent for the first 6 months. What is the effective rent per sq ft annually for this 5 yr lease? A 20 B 18 C 22 D 9 ```

Answer 25

B

Question 26

``` The difference between PGI and EGI is A Expenses B taxes C vacancy and collection losses D excess rent ```

Answer 26

C

Question 27

``` EGI can be forecast for A only 1 yr B only past 3 yrs C multiple years D none ```

Answer 27

C

Question 28

``` if net income changes as follows: 24000, 24720, 25462, 26225, 27012, this is an example of what pattern? A Constant Ratio-increase B Constant Ratio-decrease C straight line D step-up ```

Answer 28

A

Question 29

``` The function to which the appraisal is put is its A intended use B Intended user C purpose D meaning ```

Answer 29

A

Question 30

``` The IRV equation is used in A cost new estimates B Behavior capitalization C Both direct and yield caps D neither direct or yield caps ```

Answer 30

C

Question 31

``` Annualized yield rate on capital that is generated by an asset or within a group of capital assets over a period of ownership is : A nominal tax rate B effective tax rate C internal rate of return D overall cap rate ```

Answer 31

C

Question 32

__________ are among the best sources of information indicating rates of return for income producing properties

Answer 32

Market Surveys

Question 33

The ___________ involves a split rate technique: a speculative risk rate for profit and a safe rate for a sinking fund to account for the recovery of invested capital.

Answer 33

Hoskold premise

Question 34

``` The mortgage cap rate uses the symbol A Ye B Ro C Yo D Rm ```

Answer 34

D

Question 35

``` Regarding an investment property, the income and value are changing exponentially at a constant ratio. The overall rate Ro is 10% and the constant and the constant rate of change is 2%. What is the indicated yield rate Yo? A 10% B 8% C 12% D 10.2% ```

Answer 35

Yo=Ro+CR Yo=10%+2% 12%

Question 36

DCF can measure the worth of ___ income stream

Answer 36

any

Question 37

``` The symbol Ye represents: A Overall cap rate B Equity Yield Rate C Mortgage Constant D Building cap rate ```

Answer 37

B

Question 38

The following are ____ cap techniques: - derivation from comp sales - band of investment with land improvement - band of investment with mortgage equity - NOI ratio method - debt coverage ratio

Answer 38

direct

Question 39

_____ capitalization, requires and specifies the following components - projection period - initial projected net income - income pattern and change over the projection period - property value change over projection period - expected profit or yield

Answer 39

Yield

Question 40

Relationship between dollars of tax and dollars of market value

Answer 40

effective tax rate

Question 41

If the current level of assessment is 75% and nominal tax rate is 8% what is the effective tax rate

Answer 41

E=AT .75*.08=.06 6%

Question 42

Effective tax rate formula

Answer 42

Effective Tax rate= Assessment Rate* Nominal Tax rate | E=AT

Question 43

The % of profit from a real estate investment is

Answer 43

Yield rate

Question 44

If a property with a 9% yield rate is expected to produce 10,000 in net income in perpetuity and its market value remains unchanged, what is the overall property cap rate?

Answer 44

9%

Question 45

``` Formula for a property expected to produce level net income but value is forecast to change 20% over the projection period? A Ro=Yo-CR B Ro=Yo-change(1/n) C Ro=Yo-change(SFF) D Ro=Yo-change (K factor) ```

Answer 45

C

Question 46

``` If property value and net income are forecast to change exponentially at a constant ratio, which model should be used? A Ro=Yo-CR B Ro=Yo-change(1/n) C Ro=Yo-change(SFF) D Ro=Yo-change (K factor) ```

Answer 46

A

Question 47

``` If the income and value are expected to change on a straight line basis at a constant amount, which model should be used? A Ro=Yo-CR B Ro=Yo-change(1/n) C Ro=Yo-change(SFF) D Ro=Yo-change (K factor) ```

Answer 47

B

Question 48

If income is expected to change exponentially at a different rate than the property value, the ____ can effectively be used to convert the income to a stabilized level equivalent

Answer 48

K factor

Question 49

The ___ residual technique assumes the ___ value is known and the building value is unknown

Answer 49

building, land

Question 50

The property model Ro=Y-CR is used when ___and ___ are expected to change exponentially (constant ratio).

Answer 50

income, value

Question 51

When using the exponential constant ratio model where Yo=9%, CR=4%, and ETR=2%, what is the tax loaded overall cap rate?

Answer 51

7%

Question 52

Which technique can be used to value any income pattern?

Answer 52

DCF

Question 53

Formula if No change in value or income

Answer 53

R=Y

Question 54

Straight line change

Answer 54

R=Y-change(1/n)

Question 55

Exponential change formula

Answer 55

R=Y-CR