Unit 8 – Quiz

Which of the following is an area of Real Estate specialization?

Which of the following trends impacts the real estate industry?

What are the benefits of including real estate in a portfolio?

Which of the following is not one of the forces that influences the real estate market?

Who is responsible to Verify, authenticate, certify or attest the execution of any legal instrument?

Which of the following represents the real estate life-cycle correctly?

Which of the following is NOT one of the forces that influences the real estate market?

Which of the following is NOT a member of organized real estate?

Base year of BSE Realty index is

Which of the following is the umbrella organization for the organized real estate developers and builders in India?

NHB Residex and CNX Realty Index are

Which of the following is NOT one of the geographical references used to describe unsubdivided land?

Which of the following best defines real estate?

The residual income from real estate available to land is representative of the principle of

Which is a loan given for implementing repair works and renovations in a home that has already been purchased by the buyer?

What are investments that occupy a middle position in the capital stack, as a subordinated debt or preferred equity position?

Which one of the following is not a characteristic of real estate market?

This relates to information that is used directly in the analysis of the subject property and this is

The criteria that can be applied for analysis of the highest and best use of property includes

A property’s greatest potential market value is limited by the market value of the other, similar properties. This principle is known asA property’s greatest potential market value is limited by the market value of the other, similar properties. This principle is known as

A metes-and -bounds legal description

Which amongst the following approaches of valuation, involves accrued depreciation that is accounted for when determining the current value?

Which of the following statements about property value is not true?

When estimating the value for a particular piece of property, an appraiser will not investigate?

An appraisal is

What is the name of the lender in a three-party security instrument that hypothecates real estate?

In the case of ________ the rate of interest varies according to market movements.

Factors determining the value of real estate include

If the economic life of a property is 50 years, the annual depreciation rate is

Which is the most common form of Mezzanine Financing?

For a real estate construction company, which of the following are not part of Profit and Loss Statement?

Which trade like stocks and own a portfolio of underlying real estate or real estate mortgages?

The borrower stands to gain in a rising interest rate scenario in the case of

Various forms of holding Real assets include

Which of the following is not a type of REIT?

Which of the following factors influence real estate valuation?

Some of the characteristics that make Real Estate unique as compared to other investment alternatives include

Real investments include

In the Discounted Cash Flow (DCF) valuation procedure

The two major characteristics of real estate that affects it’s value

When calculating income from a let out house property, deduction on interest on borrowed capital is applicable U/s

The primary function of the Real Estate brokerage industry is to

What is the relationship between foreign direct investment (FDI) and multinational enterprises (MNEs)?

Value of the leased fee estate is equal to

How is land different than other property assets?

If a party is concerned about his or her ownership rights in a parcel of real property, what would be the best course of action?

When older structures are revitalized, with rehabilitation and renovation occurring, the area is said to be undergoing

This principle observes that consistency in ownership of land and zoning or usage, tends to maximize value. This principal is

Which of the following is NOT applicable to salesperson compensation?

What is the principal benchmark used to represent indirect investment in real estate. It is a real time market-cap weighted index of all REITs actively traded on the New York Stock Exchange and American Stock Exchange.

For a company to get selected in the CNX realty index , the company should have an investable weight factor (IWF) of at least

To which of the following does real property refer?
A. The Land itself
B. The Rights of Ownership
C. Common Law
D. Land Titles Registry

What is generally a type of subordinate debt financing that provides financing between the senior loan and the equity in a venture or project?

Which of the following are true about Reverse Mortgage?
I) It is also called lifetime mortgage
II) It is used to release the home equity in the property as one-time payment or multiple installments

Which of the following terms refers to the purchase of land as well as the actual property?

Identify the form of insurance that protects the lender against failure to pay the mortgage?

The most important difference between Financial assets and Real assets include

If a person has complete control over their property, and the ownership in the property is not defeasible, what interest does the person have in the property?

What is the difference between a specific lien and a general lien?

The legal act of transferring ownership, or the intention to have a deed be operative and effective is manifested by _____________ of the deed.

Which of the following represents an arm’s length transaction and must be included from consideration in an appraisal?

The principle of value that states that two adjacent parcels of land combined into one larger parcel could have a greater value than the two parcels valued separately is called

One complication that appraisers may face is the variety of lease types that may be available for a particular property type. Which of the following statements best describes a “graduated” or step-up lease?

The going-in cap rate or overall capitalization rate is a measure of the relationship between a property’s current income stream and its price or value. Which of the following statements regarding cap rates is true?

Real Estate as an investment is fairly________, thus resulting in ___________ transaction costs than other types of investments.

Which of the following are correct about section 24, when applied to calculate income from a let out house property?

A real estate brokerage firm specializes in property management. Which one of the following property management activities is illegal?

Which of the following REIT’s (Real Estate Investment Trust) refers to a corporate entity that is engaged in the acquisition, management, renovation, building and sale of real estate. They are preferred by professional money managers because they are likely to offer higher rewards?

The annual net income of a REIT (Real Estate Investment Trust)

Which one of the following type of REIT specializes in apartment buildings and/or other residential properties leased to individuals?

Which one of the following REIT is a company that specializes in underwriting, acquiring and holding debt obligations guaranteed by real estate properties?

Adding Real Estate in an investor’s portfolio
I) Hedges inflation
II) Diversifies portfolio
III) May increase risk adjusted performance
IV) Guarantees enhanced returns
Choose the incorrect option from above

What is the relationship between the ex ante return on an investment and the price for the asset paid by the investor?

The means by which individual hold their claims on real assets in a well developed economy are

Which of the following statements is not true about Real Estate brokers?

A type of mortgage in which the lender makes periodic payments to the borrow, who is required to be age 62 or older in the FHA program, is called

A seller took 10% down in cash and provided 90% of the sale price as a first mortgage. The best way to describe the mortgage is

Real estate market characteristic that that denotes that every piece of real estate is unique, in terms of its location, in terms of the building, and in terms of its financing?

Salesperson Ward sells a listing of a competing brokerage with the commission payable being divided evenly between the listing and selling brokerages. If Ward is on a 55/45 split with her brokerage, how much would she receive if the property sold at $175,000 with a commission rate of 6%?

Salesperson Smith received $12,379.50 as 90% of ABC Realty Inc.’s 7% commission. What was the sale price of the house?

The following data is available for a piece of property
Asking price: Rs.800000/-
Net Income : Rs.80,000/-
Market Yield: 11%
What should be the value of the property according to capitalization approach?

Which of the following are not true about Equity Financing?
I. It gives the investor a share in the property because the money he lends to the company gets added to its capital
II. Profit sharing with the investors is one of the popular ways of repayment for equity finances
III. Lack of flexibility, transparency, and simplicity limits the appeal of equity financing
IV. It is one of the most difficult methods of financing investments in the real estate

The owner of a large parcel of real estate legally divided it into two smaller parcels. Parcel North was directly to the north of Parcel South. The only road in the area bordered Parcel South. The owner intended to keep Parcel North, and wanted to prevent it from becoming landlocked. In the deed to the buyer of Parcel South, the owner reserved a non-exclusive easement for ingress and egress purposes over the westerly 8 feet of Parcel South. After both parcels were sold to two new owners, the new owner of Parcel South fenced in the entire parcel, making ingress and egress over the westerly 8 feet impossible for the new owner of Parcel North. In a lawsuit between the new owner of Parcel North and the new owner of Parcel South, who will most likely win?

Ulyanna and Daniel own two contiguous properties situated on the shores of a fast-moving river. Ulyanna’s parcel is situated upstream from Daniel’s parcel. Over time, the action of the river’s water has moved some silt and dirt from the shores of Ursula’s property and deposited it downstream on the shores of Daniel’s property. Based upon this fact pattern, which of the following lists best describes what has occurred on Daniel’s property?

Which of the following is true about the agent’s loyalty and obedience?
I. Buyer’s must do everything possible to gain an advantage for the buyers.
II. Can buy property at his own name and sell immediately for Maximum Profit.
III. Seller’s agent must do everything possible to gain an advantage for the buyers.
IV. Seller’s agent must obey all lawful instruction of the seller, is not obligated to obey instructions from the buyer.
V. Buyer’s agent must obey all lawful instruction of the seller, is obligated to obey instructions from the seller.

The Loan-to-Value (LTV) ratio is the maximum amount a lender will lend to finance a loan collateralized by real estate. The loan is based on a percentage of either the purchase price or the appraisal, whichever is less. The 20% down payment lenders traditionally required with conventional financing put homeownership beyond the reach of many Americans. FHA fully-insured financing substantially lowers the down payment lenders require for the purchase of a home because FHA mortgage insurance minimizes lender risk in the event of borrower default. All of the following statements are incorrect, except

An appraiser is hired to appraise a single-family residence as part of a purchase transaction. The subject property has 4 bedrooms and 4 bathrooms. The appraiser needs comparable to complete the appraisal, and finds 3 recently-sold properties in the same subdivision. The first comparable has 4 bedrooms and 4 bathrooms. The second comparable has 4 bedrooms and 3 bathrooms. The third comparable has 3 bedrooms and 4 bathrooms. What is a correct statement regarding the market data approach?

Which of the following is/are essential condition(s) for Mortgage?
I. There must be contract, express or implied.
II. Property must be identified, specific immovable property must be made security for the repayment of the loan.
III. The Legal form is not required to be compiled with.
IV. Amount and the terms of the loan must fixed, the rights of the parties must be defined or be definable.
V. Interest on Loan must be floating

A business trust, registered under SEBI (Real Estate Investment Trusts) Regulations, 2014 holds 100% of the shareholding in Alpha Ltd, a Indian Company. The business trust earned short term Capital Gain of 1.5 Crore on sale of listed shares of Alpha Ltd, which was distributed to unit holders. The tax liability in the hands of business trust is

A REIT with 100 shares outstanding earns $1,000 in rent and incurs operating expenses of $400.In addition, the REIT owns property with an historic cost of $6,000 and depreciates it over a15 year period using straight-line depreciation. What are the funds from operations per share, and the earnings per share for this REIT?

Which of the following is/are not true about Immovable Property purchased by Foreign Company in India?
I. A foreign company establishing Branch Office or other place of businesses in India, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity.
II. On winding up of the business, the sale proceeds of such property can be repatriated without the prior approval of Reserve Bank.
III. Acquisition of immovable property by entities who had set up Branch Offices in India would not require prior approval of RBI irrespective of their main branch.
IV. Foreign Company establishing Liaison Office cannot acquire immovable property.

A property has a McDonald’s restaurant on it, which can earn $50,000 per year. In any other use (including another brand of restaurant), the most it can earn is $40,000 per year. Assuming a discount rate of 10% and constant cash flow in perpetuity, what is the “investment value” of this property to McDonald’s, and what is its “market value”?

Suppose an office building has a single tenant who pays $50,000 per year at the end of each year in a 5-year triple-net lease (annual payments). At the end of the sixth year you expect the rent to rise to $70,000 per year. At the end of 10 years, just after collecting the rent for that year, you expect to sell the building for 10 times the rent that year. What is the value of the property if the required initial return is 12 percent per year?

Which of the following is/are not true about seller’s Right and Duties?
I. The seller is bound to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title there to.
II. The seller is bound to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits.
III. The seller is not bound to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power.
IV. The seller is not entitled to the rents and profits of the property if the earnest money is paid by the buyer for an Immovable Property

The Department of Industrial Policy and Promotion (DIPP) permitted FDI up to 100% under automatic route in townships, housing, built-up infrastructure and construction development projects subject to the following guidelines and the minimum area to be developed under each project would be as follows

Which of the following additional clauses can turn out to be loopholes for a balanced and safe agreement?
I. Interest on delayed payment.
II. Time frame for Project Completion.
III. Dispute Redressal