1.The rate on a loan is based on an Index + Spread. Name and describe three types of risks a lender considers when estimating the spread on a loan?

2.Which appraisal method compares recently-sold properties in a market to arrive at a value estimate for a property with similar characteristics?

3.Circle all that apply: In the Income Capitalization approach to valuation:

a.The cap rate of recent similar sales in the market may be used to determine the value of the subject property

b.Debt service is an important component of the valuation

c.The Gross Income Multiplier, Direct Capitalization and Discounted Cash Flow techniques could be used to determine value

d.The cost of replacing the property is given consideration

e.All of the above

4.The _________________ is the discount rate which yields a zero NPV for any given stream of cash flows

5.Circle the correct answer. Which of the following data points are required for a Discounted Cash Flow:

a.Effective Gross Income Projections

b.Discount rate

c.Interest rate on the loan

d.a. & b.

e.a. & c.

f.a. b. & c.

6.Match the term with the most relevant example:

a.Modified Gross or Hybrid Lease

b.Concessions

c.Indexed rent increase

d.Expansion Option

e.Percentage rent

1. Tenant has a right of first refusal to the adjacent space

2. Lessee pays a proportion of the revenues earned in the rented space

3. Reserved parking spaces and 2 months free rent

4. Rent is adjusted according to CPI

5. Tenant pays utilities, RE taxes and insurance, landlord pays for the other operating expenses

e.g (a1/ a2/e4)