1. Real estate ventures structured with sponsor promotes have extensive provisions on the sharing of cash flow. Which of the following statements is most appropriate in this regard?

A. investor and sponsor cash flow rights are fairly standard

B. investor and sponsor cash flow rights are determined by state law

C. inestor and sponsor cash flow rights can vary dramatically from deal to deal and must be reviewed to be understood by the parties

D. Investor and sponsor cash flow rights are pari-passu

2. Commercial real estate properties are often held in a separate legal entity. The most popular entities for this purpose are:

A. S Corporation or LLC

B. LLC or Limited Partnership

C. C Corporation or General Partnership

D. Direct individual ownership or Joint Venture

3. The main reason that separate legal entities are often used to hold commercial properties is:

A. Ease of management

B. Taxation

C. Liability protection

D. Ability to obtain financing

4. Real estate ventures that have complex cash flow sharing arrangements are typical. The IRS (Internal Revenue Service) is concerned that taxation and reporting are appropriate for these vehicles. In this context, all of the following words or phrases tend to be relevant, EXCEPT:

A. stock options

B. substantial economic effect

C. capital accounts

D. special allocations

5. Often a real estate entrepreneur/sponsor will put together a venture structure with investors where he will be rewarded for a strong performance. This "reward" factor is generally referred to as:

A. the performance bonus

B. the pari-passu distribution

C. either the carried interest or promote

D. stock options