Sunday, February 27, 2011

Chapter 6 Questions

The Real Estate Market establishes prices to:

A. Inform real estate investment decisions
B. Stimulate or discourage real estate development
C. Allocate space among competing land uses and establish land patterns
D. All of the above

ANSWER - D (page 124)

A private corporation created by an act of Congress to stimulate and maintain the residential secondary mortgage market is known as

A. Government Subsidized Entity
B. Government Sponsored Enterprise
C. Government Sponsored Entity
D. Governing Secondary Mortgage Market

ANSWER – B (page 136)

True/False – Perfect Knowledge is NOT a characteristic of a perfectly competitive market.
ANSWER – False (page 127)

True/False – The use by which the market prices the property is the highest and best use.
ANSWER – True (page 131)

True/False – Market inefficiencies and imperfections cause frictions that require professional interventions such as appraisers.
ANSWER – True (page 131)

True/False – The secondary mortgage market is where mortgages are created between lenders and borrowers.
ANSWER – False (page 135)

True/False – Maturity Mismatch typically occurs in periods of unanticipated inflation when income adjustments fail to keep up with the rising cost of borrowing.
ANSWER – True (page 139)

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