1. The default rate is used by the _______________ to examine the amount of money available for the equity investor after all expenses, taxes and the mortgage is paid.

   	A.	lender
   	B.	investor
   	C.	appraiser
   	D.	tenant

2. The outstanding loan balance that is paid to the lender when you model a sale of the property is the:

   	A.	return on the loan the lender made.
   	B.	return of the investment made by the lender.
   	C.	return on the property to the investor.
   	D.	return of the investment to the investor in the property.

3. Based on your understanding of the relation between the construction of a capitalization rate and a net income multiplier, which of the following statements best describes what we would expect to observe when comparing first-tier (Class A) properties to other property quality classifications within an individual property type?

   	A.	low capitalization rates and low net income multipliers
   	B.	low capitalization rates and high net income multipliers
   	C.	high capitalization rates and low net income multipliers
   	D.	high capitalization rates and high net income multipliers

4. Given the following information, calculate the debt coverage ratio for this investment: Potential gross income: $120,000 Vacancy rate: 9% Net operating income: $57,900 Operating expenses: $51,300 Acquisition Price: $520,000 Debt service: $40,000

   	A.	0.69
   	B.	1.45
   	C.	2.73
   	D.	8.29

5. In contrast to public markets, private markets are characterized by individually negotiated transactions that take place without the aid of a centralized market. Therefore, private markets will generally have:

   	A.	high transaction costs and high liquidity.
   	B.	high transaction costs and low liquidity.
   	C.	low transaction costs and high liquidity.
   	D.	low transaction costs and low liquidity.