Question 1

The investment tax credit has been eliminated entirely for all types of real estate except:

Accepted Answer

A)  low-income housing projects.
B)  single-family dwellings.
C)  shopping centers.
D)  raw land.
E)  developed land.F) D) and E)
G) All of the above

Question 2

Home ownership rates are highest among those individuals in which age group?

Accepted Answer

A)  Under 34
B)  35 - 44
C)  45 - 54
D)  55 - 64
E)  65 and overF) C) and D)
G) B) and C)

Question 3

Factors such as fear of war,political instability,and inflation cause gold prices to decline.

Accepted Answer

A) True 
 B)False

Question 4

The median price of existing homes:

Accepted Answer

A)  has increased over the past 30 years, thereby acting as a hedge against inflation.
B)  has risen less than the Consumer Price Index.
C)  always increases in value.
D)  tends to be countercyclical, thereby acting as a hedge against the business cycle.
E)  remains constant over time.F) All of the above
G) B) and E)

Question 5

Besides gold,other metals that are used as a hedge against inflation include the following,except:

Accepted Answer

A)  silver.
B)  aluminum.
C)  platinum.
D)  palladium.
E)  rhodium.F) B) and D)
G) A) and E)

Question 6

You can gain entry to a shopping center investment by investing $5,000 in a limited partnership.

Accepted Answer

A) True 
 B)False

Question 7

Ginnie Maes and Freddie Macs are guaranteed by agencies closely tied to the federal government,making them as secure as U.S.Treasury bonds and notes.

Accepted Answer

A) True 
 B)False

Question 8

During which of the following economic periods is the price of a precious metal,such as gold,silver or platinum,likely to increase?

Accepted Answer

A)  Recession
B)  Depression
C)  Peace time
D)  Deflationary
E)  InflationaryF) A) and B)
G) A) and C)

Question 9

Popular gold bullion coins today include:

Accepted Answer

A)  Australia's kangaroo nugget.
B)  Canadian gold maple leaf.
C)  Mexican 50 peso.
D)  Chinese Panda.
E)  All of these.F) A) and B)
G) D) and E)

Question 10

Diversification in direct real estate investment is difficult because of the large size of most real estate projects.

Accepted Answer

A) True 
 B)False

Question 11

On small gold bars,gold dealers and banks add a five to eight percent premium over the pure gold bullion value.

Accepted Answer

A) True 
 B)False

Question 12

Mary Simpson bought a rental property for $200,000 cash.Later she sold the property for $230,000.What was her profit and return on this investment?

Accepted Answer

Selling price = $230,000
Purch...

Question 13

Which of the following is an advantage of investing in limited partnerships,REITs,mortgages,or participation certificates?

Accepted Answer

A)  a possible hedge against inflation.
B)  easy entry.
C)  no management concerns.
D)  financial leverage.
E)  All of these.F) C) and D)
G) A) and B)

Question 14

Investment in land usually produces considerable cash flow.

Accepted Answer

A) True 
 B)False

Question 15

In what type of real estate investment does the investor not hold legal title to the property?

Accepted Answer

A)  Vacation homes
B)  Hotels
C)  Apartments
D)  Direct investment
E)  Indirect investmentF) All of the above
G) C) and D)

Question 16

Real property equity investments ______ provide protection against purchasing power risk.

Accepted Answer

A)  usually
B)  always
C)  never
D)  without exception
E)  at no time in the past or future willF) A) and D)
G) A) and B)

Question 17

Austin has invested $50,000 as one of 5 general partners in a large shopping center that was purchased for $900,000.The shopping center has been unsuccessful and the 15 unlimited partners fear that the property could be foreclosed upon soon.What amount is Austin liable for if the project fails?

Accepted Answer

A)  $60,000
B)  $18,000
C)  $180,000
D)  $900,000
E)  $50,000F) A) and E)
G) A) and D)

Question 18

Stuart Michelson has invested in several pieces of real estate.Which one of the properties that Stuart owns would be considered commercial real estate?

Accepted Answer

A)  4 bedroom home that he does not rent out
B)  20 acre tract of farm land that is sitting idle
C)  Fourplex that he rents to college students
D)  100 acres of land in the mountains that he hopes to subdivide and sell as residential lots
E)  Vacation home.F) A) and E)
G) A) and B)

Question 19

Which of the following has lessened the appeal of investing in real estate?

Accepted Answer

A)  Hedge against inflation
B)  Professional management
C)  Financial leverage
D)  Tax Reform Act of 1986
E)  National Association of RealtorsF) All of the above
G) C) and E)

Question 20

Which type of REIT invests directly in income-producing real estate?

Accepted Answer

A)  Compound
B)  Equity
C)  Mortgage
D)  Hybrid
E)  SimpleF) A) and E)
G) A) and B)

Exam 17: Investing in Real Estate and Other Investment Alternatives

During which of the following economic periods is the price of a precious metal,such as gold,silver or platinum,likely to increase?

Correct AnswerverifiedShow Answer

Austin has invested $50,000 as one of 5 general partners in a large shopping center that was purchased for $900,000.The shopping center has been unsuccessful and the 15 unlimited partners fear that the property could be foreclosed upon soon.What amount is Austin liable for if the project fails?

Correct AnswerverifiedShow Answer

Diversification in direct real estate investment is difficult because of the large size of most real estate projects.

Correct AnswerverifiedShow Answer

Which type of REIT invests directly in income-producing real estate?

Correct AnswerverifiedShow Answer

Factors such as fear of war,political instability,and inflation cause gold prices to decline.

Correct AnswerverifiedShow Answer

In what type of real estate investment does the investor not hold legal title to the property?

Correct AnswerverifiedShow Answer

On small gold bars,gold dealers and banks add a five to eight percent premium over the pure gold bullion value.

Correct AnswerverifiedShow Answer

Ginnie Maes and Freddie Macs are guaranteed by agencies closely tied to the federal government,making them as secure as U.S.Treasury bonds and notes.

Correct AnswerverifiedShow Answer

Real property equity investments ______ provide protection against purchasing power risk.

Correct AnswerverifiedShow Answer

Stuart Michelson has invested in several pieces of real estate.Which one of the properties that Stuart owns would be considered commercial real estate?

Correct AnswerverifiedShow Answer

Which of the following has lessened the appeal of investing in real estate?

Correct AnswerverifiedShow Answer

The median price of existing homes:

Correct AnswerverifiedShow Answer

Besides gold,other metals that are used as a hedge against inflation include the following,except:

Correct AnswerverifiedShow Answer

Investment in land usually produces considerable cash flow.

Correct AnswerverifiedShow Answer

Which of the following is an advantage of investing in limited partnerships,REITs,mortgages,or participation certificates?

Correct AnswerverifiedShow Answer

Home ownership rates are highest among those individuals in which age group?

Correct AnswerverifiedShow Answer

Popular gold bullion coins today include:

Correct AnswerverifiedShow Answer

You can gain entry to a shopping center investment by investing $5,000 in a limited partnership.

Correct AnswerverifiedShow Answer

The investment tax credit has been eliminated entirely for all types of real estate except:

Correct AnswerverifiedShow Answer

Mary Simpson bought a rental property for $200,000 cash.Later she sold the property for $230,000.What was her profit and return on this investment?

Correct AnswerverifiedSelling price = $230,000Purch...View AnswerShow Answer

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Selling price = $230,000
Purch...
View Answer