Chapter I

Question 1

True or False AMORTIZED LOAN: A loan where the principal is paid down over the life of the loan

Answer 1

True

Question 2

True or False “CAP” RATE: A ratio between the net operating income and the original cost of the property

Answer 2

True

Question 3

True or False DISCOUNT POINT: 1% of the loan amount (not the sales price)

Answer 3

True

Question 4

True or False MILE: 5,280 linear feet

Answer 4

True

Question 5

True or False SECTION OF LAND: 640 acres

Answer 5

True

Question 6

True or False NET OPERATING INCOME: The gross income of a property minus the operating expenses. This figure does
not include the payment on the outstanding debt (the loan).

Answer 6

True

Question 7

True or False ACRE: 43,560 square feet

Answer 7

True

Question 8

True or False Banker’s or Statutory year – 360-day year (assumes all months have 30 days).

Answer 8

True

Question 9

True or False LENGTH × WIDTH = AREA

Answer 9

True

Question 10

True or FalseA farmer-owned 2 sections of land. He sold the property for $1,500 per acre. What is the sales price of the land?
640 acres × 2 = 1,280 acres
1,280 × $1,500 = $1,920,000

Answer 10

True

Question 11

True or FalseReal Estate and/or Real Property: The land and everything permanently fastened to the land.

Answer 11

True

Question 12

True or False Rectangular Survey System separates everything by township

Answer 12

True

Question 13

True or False FMNAA (Fannie Mae) means Federal National Mortgage Association

Answer 13

True