Unit 5 Exam: Techniques of Investment Analysis

Question 1

The primary purpose of subdivision regulations in most states is to:

a. enable developers to profit from rezoning
b. divide large parcels of land into small lots
c. prevent unplanned and haphazard subdividing
d. inhibit growth in developed areas

Answer 1

c. prevent unplanned and haphazard subdividing (p. 58)

The purpose of these laws is to prevent unplanned and haphazard division of large parcels of land into small building lots. City and county officials are charged with the duty of supervising the orderly growth of their communities.

Question 2

A mixed-use subdivision describes:

a. properties having no deed or subdivision restrictions
b. proportionate grouping by population age
c. a legally prohibited method of development
d. different but compatible developments in one designated area

Answer 2

d. different but compatible developments in one designated area (p. 61-62)

Question 3

A permissible request to change the allowed use of one property to something different from current zoning laws is called:

a. rezoning
b. variance
c. site zoning
d. nothing. it is not allowed.

Answer 3

b. variance (p. 60)

Question 4

In a market analysis, the occupancy rates for a particular type of property should be compared with:

a. the community’s overall occupancy factor
b. the nation’s occupancy factor for that type of property
c. the community’s occupancy factor for that type of property
d. the U.S. department of labor’s employed persons list

Answer 4

c. the community’s occupancy factor for that type of property (p. 52-53)

Question 5

When analyzing the site of a new commercial investment project, all of the following factors must be considered EXCEPT:

a. the site’s surface attributes
b. the site’s subsurface attributes
c. the site’s possible contamination
d. the site’s fertility

Answer 5

d. the site’s fertility (p. 63-66)

Question 6

When examining a building included in a proposed commercial investment, all of the following factors regarding the property must be considered EXCEPT:

a. appearance
b. location
c. physical condition
d. the appeals period following a city’s environmental review determination

Answer 6

d. the appeals period following a city’s environmental review determination (p. 66-67)

Question 7

Two expenses that will be imputed to a project’s operating expenses, whether actually incurred or not, include:

a. leasing commissions and debt service
b. management fees and repair expenses
c. corporate overhead and key man insurance
d. market studies and feasibility analyses

Answer 7

b. management fees and repair expenses (p. 69)

Question 8

Which of the following statements about residential subdivision restrictions is FALSE?

a. they are enforceable only against the original homeowner
b. they are covenants as long as they are enforced
c. they are effective as long as they are enforced
d. they are established to maintain the homogeneity of property use and value

Answer 8

a. they are enforceable only against the original homeowner (p. 58)

Question 9

A feasibility analysis is primarily designed to provide an investor with information appropriate to:

a. avoid paying income taxes
b. guarantee a profit on the investment
c. make an economically rational investment decision
d. satisfy various government regulatory agencies

Answer 9

c. make an economically rational investment decision (p. 68-69)

Question 10

The Environmental Protection Agency (EPA) establishes guidelines for the prevention of all the following EXCEPT:

a. air pollution
b. soil contamination
c. water impurities
d. property accessibility

Answer 10

d. property accessibility (p. 56-57)