1.) Which of the following examples illustrates the highest form of leverage?

a) $100,000 purchase price, 20 percent down payment

b) $100,000 purchase price, 40 percent down payment

c) $100,000 purchase price, 100 percent down payment

d) $100,000 purchase price, 0 percent down payment

2.) The amount of income left to an investment property after operating expenses have been paid but before the mortgage debt is addressed is known as

a) pre-debt service income

b) effective gross income

c) scheduled gross income

d) net operating income

3.) Prior to attempting a market analysis, which of the following items must be determined

a) Investment property tax basis

b) market area boundaries

c) total cost of construction

d) required return on the investment

4.) What calculation is used to determine the capital gain or loss on an investment property

a) depreciated value plus improvements minus realized selling price

b) adjusted basis minus the realized selling price

c) original purchase price minus the depreciated value

d) realized selling price minus the adjusted basis

5.) Which of the following lenders makes most of the loans for long term, large commercial real state developments

a) savings and loan associations

b) life insurance companies

c) commercial banks

d) credit unions

6.) Commercial banks are mainly interested in making

a) 30 year FHA insured loans

b) 30 year VA guaranteed loans

c) 30 year conventional loans

d) short term commercial and real estate loans