QUESTION 6

1. To discover the future sales price of an income producing piece of real estate an investor must determine the NOI for the year the property is sold and the going out cap rate.

   True

   False

0.5 points

QUESTION 7

1. Losing a tenant in the last year of an investor's hold period would reduce the expected BTER.

   True

   False

0.5 points

QUESTION 8

1. Which of the following is the most risky type of real estate investment?

   	A.	The reposition of an existing hotel
   	B.	The new development of a speculative hotel
   	C.	A stabilized commercial property
   	D.	The new development of a pre-leased commercial property

0.5 points

QUESTION 9

1. A real estate development which will involve renting units as opposed to selling units, must consider what costs which they would not have to consider if they were to sell the units?

   	A.	Foreign Exchange costs
   	B.	Loan application fees and origination points
   	C.	Maintenance costs
   	D.	Higher required equity from banks

0.5 points

QUESTION 10

1. To overcome the potential shortcomings of single-year decision making metrics, many investors in real estate also perform multiyear discounted cash flow (DCF) valuation. DCF valuation differs from the single-year ratio analysis in all of the following ways EXCEPT:

   	A.	Only with DCF must the investor estimate an appropriate investment horizon accounting for how long they will hold the property.
   	B.	Only with DCF must the investor select the appropriate yield at which to discount all expected future cash flows.
   	C.	Only with DCF must the investor make explicit forecasts of the property's net operating income for each year in the expected holding period.
   	D.	Only with DCF must the investor use a defensible cash flow estimate that incorporates appropriate measures of income and expenses, comparable properties and social/legal environment conditions