Question 11 pts

A banker loans someone money at 5.6% interest. This interest rate is the loan's:

Group of answer choices

rate of appreciation

rate of return

dividend

value

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Question 21 pts

A buyer won't pay more for an item than she would have to pay for a similar, equally desirable item that she could get from another seller, unless that would involve an unreasonable delay. This is the principle of:

Group of answer choices

absorption

supply and demand

substitution

stabilization

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Question 31 pts

A sale-leaseback is most likely to be a source of cash for:

Group of answer choices

an investor who owns a single-family rental home

an investor who owns a small office building leased to tenants

a business owner who also owns the property occupied by the business

a business owner who wants to lease some office space for the business to occupy

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Question 41 pts

A security:

Group of answer choices

may represent either a debt investment or an ownership investment

is an investment instrument that does not confer a right to direct managerial control over the enterprise

must be issued and bought or sold in compliance with federal and state securities laws

All of the above

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Question 51 pts

An investor buys a self-storage facility after he retires. He manages the property himself with the help of a part-time clerk. This is an example of a/an:

Group of answer choices

sale-leaseback

ownership investment

debt investment

security

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Question 61 pts

Arnie just paid $980,000 for an income property, and he's expecting a 7% annual return. To find the property's annual net operating income, you would:

Group of answer choices

multiply $980,000 by .07

divide $980,000 by .07

multiply $980,000 by 7, then divide by 12

divide $980,000 by .70, then multiply by 12

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Question 71 pts

Certain residential rental markets are greatly affected by:

Group of answer choices

consumer trends

reserve requirements

mutual funds

seasonal population changes

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Question 81 pts

In regard to the principle of supply and demand, which of these statements is correct?

Group of answer choices

When demand exceeds supply, prices rise

When supply exceeds demand, prices rise

As demand increases, supply decreases, and prices drop

As supply decreases, so does demand, and prices drop

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Question 91 pts

Investors generally require the highest yields from investments that are:

Group of answer choices

lower-risk and less liquid

lower-risk and more liquid

higher-risk and less liquid

higher-risk and more liquid

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Question 101 pts

Lois bought an income property for $300,000. She borrowed 80% of the price and paid 20% down out of her own funds. Later, she sold the property for $365,000, paying off the loan out of the sale proceeds. Because this was a leveraged investment:

Group of answer choices

the property appreciated much more than it otherwise would have

Lois's equity was much greater than it otherwise would have been

Lois received much more cash from the sale than she otherwise would have

Lois's rate of return was much higher than it otherwise would have been

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Question 111 pts

Luke buys 100 shares of a publicly traded company's stock. A few weeks later, he calls his broker to sell the shares. The sale goes through the next business day and the brokerage sends Luke a check for the proceeds immediately. This speedy conversion to cash illustrates:

Group of answer choices

excellent liquidity

poor liquidity

excellent leverage

None of the above

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Question 121 pts

Stan recently purchased a rental house as investment. He could ending up losing money on the investment if:

Group of answer choices

there is an economic downturn that leads to a drop in home prices

the property's operating expenses turn out to be higher than his research led him to expect

previously unknown problems with the property are discovered

All of the above

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Question 131 pts

The same reasoning is behind the old saying "Don't put all your eggs in one basket" and this piece of investment advice:

Group of answer choices

Diversify!

Location, location, location!

Plastics!

Buy low, sell high.

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Question 141 pts

When compared to some other types of investments, the advantages of real estate investment include the potential for all of the following benefits, except:

Group of answer choices

appreciation

an annual dividend

leverage

monthly cash flow

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Question 151 pts

When the local supply of a certain type of real estate exceeds the demand, it's called a:

Group of answer choices

seller's market

buyer's market

tight money market

None of the above

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Question 161 pts

Which of the following types of investments often provides cash flow for the investor?

Group of answer choices

Commodities (such as gold)

Real estate (such as an apartment building)

Collectibles (such as paintings)

All of the above

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Question 171 pts

Which of the following is an example of a return on an investment?

Group of answer choices

Depreciation

Rent

Bonus pay from an employer

Cash reserves