1. A small office building is purchased with a $1,200,000 balloon mortgage that is

due at the end of ten years. Payments are based on a 25 year amortization period. If

one point is charged, how much of that point can be deducted annually for tax

purposes?

(A) $12,000

(B)$1,200

(C)$480

(D)$0

2. Which of following is not a benefit of refinancing?

(A) The investor can increase financial leverage

(B) IT is an alternative to a sale of the property

(C) Financial risk is increased

(D) No taxes have to be paid on the additional loan proceeds

3. Which of following does not represent a potential benefit to a company from

selling and leasing back a property?

(A) Provides a source of capital

(B) Increases the companys operating income by reducing depreciation

deductions

(C)Demonstrates the value of the companys real estate to the marketplace

(D)Increases the companys taxable income by reducing depreciation deductions

4. When doing a hold versus sell analysis, all of the following are important factors

to consider except:

(A) Projected internal rate of return and equity multiple from holding the

property

(B) Risks related to holding the property in order to achieve the projected returns

(C)Market conditions for leasing and ultimately selling the property

(D) Book value of the property at the time of sale

5. A standby loan commitment is:

(A) Another term for a construction loan

(B) A way to increase NOI for projects by reducing debt service obligations

(C)An agreement by a lender to be ready to provide permanent financing for a

property once construction is completed if certain conditions have been met

(D) A commitment that always requires the standby lender to fund the loan