21: The consumer price index (CPI) is a measure of the average change over time in the prices paid by: (a) everyone in the United States. (b) everyone in California. (c) everyone living on farms. (d) urban consumers. 22: Approximately what number of small businesses operates in California today? (a) 500,000 (b) 1 million (c) 3 million (d) 5 million 23: In California, per capita income: (a) tends to be lower in major metropolitan areas. (b) is uniform within the state. (c) is highest in Northern California. (d) varies substantially throughout the state. 24: The CPI reflects spending patterns for how many groups? (a) 2 (b) 3 (c) 7 (d) 12 25: Which of the following BEST defines density zoning? (a) The mandatory use of clustering (b) The average number of units in a development (c) A restriction on the average number of houses per acre (d) A restriction on the average number of acres per parcel 0000 26: The Federal Fair Housing Act prohibits discrimination on the basis of all the following factors EXCEPT: (a) familial status. (b) national origin. (c) religious preference. (d) sexual orientation. 27: All of the following statements regarding the Federal Reserve System are true EXCEPT: (a) all derally chartered banks must join the Federal Reserve System and purchase stock in its district reserve banks. (b) the Federal Reserve requires that member banks set aside assets as reserve funds for use exclusively as mortgage loans. (c) by increasing or decreasing reserve requirements, the Federal Reserve controls the amount of money available for mortgage loans. (d) member banks are permitted to borrow money from the reserve banks to expand their local banking operations. 28: What is used to measure how much people spend on those items affected by governmental or environmental factors? (a) Consumer price index (b) Producer price index (c) Employment cost index (d) Cost-of-living index 29: The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants on the basis of all of the following factors EXCEPT: (a) religion. (b) past credit history. (c) income from public assistance. (d) marital status. 30: A loan that includes not only the real estate but also all personal property and appliances installed on the premises is a: (a) blanket loan. (b) wraparound loan. (c) purchase-money loan. (d) package loan. 31: In a like kind exchange of property, one owner gave the other a modest amount of cash to compensate for a slight difference in value between the two properties. Based on these facts, which of the following statements is TRUE? (a) The inclusion of additional cash invalidates the "like kind" character of a 1031 exchange, and the entire transaction is taxable to the full value of both properties. (b) The additional cash is called leverage and may be included tax free in a 1031 exchange up to 15 percent of the value of the lower-priced property. (c) The additional cash is called boot and is taxed at the time of the exchange by the party who receives it. (d) A 1031 exchange permits real property to be exchanged for real property along with cash or personal property, as long as the value of the real property is at least 51 percent of the total transaction value. 32: A business venture in which a group of people pool their resources to own or develop a particular property is a: (a) limited partnership. (b) real estate investment syndicate. (c) real estate investment trust. (d) general partnership. 33: For an investment trust to qualify as a REIT for tax purposes, what percentage of its income must come from real estate investments? (a) 50 percent (b) 75 percent (c) 90 percent (d) 95 percent 0000 34: The annual rate of return on capital generated by an investment over the entire period of its ownership is called the: (a) internal rate of return. (b) net present value. (c) discounted cash flow. (d) cash-on-cash return. 35: An office building designed to accommodate the particular needs of physicians or a communications company is referred to as what type of property? (a) General purpose (b) Special purpose (c) Community of interest (d) Incubator 36: Direct capitalization and "cash on cash" return are methods of: (a) comparing the cost of loans. (b) evaluating equity investments. (c) appraising income property. (d) calculating tax assessments. 37: The 1997 Tax Act provided an individual seller who has owned and used a home as a principal residence for at least two of the five years before the sale to exclude from income up to: (a) $50,000 of gain. (b) $150,000 of gain. (c) $250,000 of gain. (d) $300,000 of gain. 38: The acronym NIMBY is an acronym that stands for: (a) Not in My Back Yard (b) No Increases Mark Bad Years (c) Negative Interest Money Buffers Yields (d) New Investments Make Best Yields 0000 0000 0000 39: The primary mortgage market includes thrifts, savings banks, insurance companies, and: (a) mortgage brokers. (b) credit unions. (c) Fannie Mae. (d) REITS. 40: Ad valorem taxes are imposed in proportion to the: (a) revenue needs of the taxing body. (b) value of the asset taxed. (c) capacity of the asset owner. (d) number of taxpayers being levied. 41: The tax rate remains the same and is applied equally regardless of the value of the item or the amount of income in a: (a) regressive tax system. (b) progressive tax system. (c) proportional tax system. (d) fee-based tax system. 42: Proposition 13 limits the ability of governing bodies to increase the tax base by increased valuation except when the property is: (a) sold. (b) appraised. (c) renovated. (d) refinanced. 43: Under California's Proposition 13, provided property remains in the same hands, taxation is limited to an annual increase of: (a) 2 percent. (b) 3 percent. (c) 4 percent. (d) 5 percent. 0000 0000 0000 44: Who, according to the Community Reinvestment Act of 1977, is responsible for addressing the needs of low income and moderate income housing in their communities? (a) Taxing authorities (b) Builders and contractors (c) Real estate companies (d) Financial institutions 45: The use of borrowed money to finance an investment is referred to: (a) liquidity. (b) leverage. pyramiding. (d) equity building. 46: Which of the following sets of words describes the properties that must be involved in a tax deferred exchanges under Section 1031 of the Internal Revenue Code? (a) Like kind (b) Not for profit (c) Senior housing (d) Low income housing 47: When using a comparable property for an appraisal, the appraiser is responsible for: (a) having a professional relationship a principle in that transaction. (b) personally inspecting the comparable property. (c) at least driving by the comparable property. (d) speaking with the present owner of the comparable property. 0000 48: All of the following are biologically defined needs EXCEPT (a) food. (b) clothing. (c) water. (d) shelter