REAL ESTATE FINANCE&INVESTMENTS CHAPTER 7 1. A property is purchased for $300,000 with an 80 percent LTV. The appreciation rate is 4% for the next 5 years what would the home equity be? 2. The objective of appraisal is to: a. Establish the highest possible price that a property can sell for b. Establish the most probable price that would be paid for property under competitive market conditions c. Establish the market value for a property's land without any structures (such as a house) d. Establish the market value for a property i the property is put to its highest and best use 3. An appraisal usually contains three approaches to valuation. Which of the following is NOT one of those approaches? (A) The Market Approach (B) The Ratio Approach (C) The Cost Approach (D) The Income Approach The subject of an appraisal has only two bedrooms, but one of the comparables used in the appraisal has three. If the adjustment for a third bedroom is $5,000, What adjustment would be needed? 4. 5. The appraised value of a property usually represents the: (A) Actual value of the property (B) Actual selling price of the property (C) Actual opinion of an appraiser (D) Actual replacement value of the property 6. Which of the following would NOT result in an increase in housing demand? (C) (A) Population growth (B) Employment growth (C) Higher interest rates (D) Higher household income