Tuesday, February 15, 2011

Exam Questions Ch. 1-5

Ch. 1 thru 5: MC and T/F

Ch. 1

Multiple Choice

1. The Real Estate Conversion deals with which concept(s):

A. Entrepreneurial Activity

B. Consuming Activity

C. All of the above (Pg. 6)

D. None of the above

2. The term Sequential Bidding refers to:

A. An indiscrete offer

B. Offers given to the seller one at a time (Pg. 8)

C. The process of the seller looking at multiple offers simultaneously

D. Waiting for the most attractive offer to come in

3. The duties of an Asset Manager include:

A. Creates Value by maximizing the attractiveness of the properties

B. Creates value by keeping the properties leased up

C. Portfolio composition

D. All of the above (Pg. 15)


1. A Permanent Mortgage is a Real Estate loan backed by the collateral of other assets, not including the property, owned by the borrower. False (Pg. 13)

2. Funds called REITs refer to Real Estate Investment Trusts. True (pg. 15)

3. The process of creating space begins with an entrepreneur or developer who wants to make space. True (Pg. 9)

4. Efficient markets tend to move relatively homogenous products, as do Real Estate markets. False (Pg. 7)

5. Land Use Planners only work for the government. False (Pg. 17)

Ch. 2

Multiple Choice

1. The aim of engineering is to:

A. Reveal a natural phenomenon in the world

B. Develop technologies to improve the world (Pg. 25)

C. Create jobs to help the economy

D. None of the above.

2. As an academic topic, Economics refers to:

A. Artificially delineated space over time

B. Allocation of scarce resources over time

C. Allocation of Scarce Resources (Pg. 24)

D. Simply, the circulation of money

3. A Framework for the academic discipline of Real Estate includes:

A. Activities Science I and II (Pg. 28)

B. Activities Engineering I and II

C. Activities Engineering II and III

D. Activities Science II and III


1. Thomas Kuhn developed the Paradigmatic Knowledge Production System. True (Pg. 31)

2. A Data Development Method will always support the accuracy of a research hypothesis. False (Pg. 32)

3. A Data Evaluative Method is the process of gathering the data. False (Pg. 32)

4. An Agency Cost is one incurred by principals. True (Pg. 44)

5. An Anomalous Fact is one suggested by theory and therefore expected. False (Pg. 45)

Ch. 3

Multiple Choice

1. Short-term memory and problem space are located:

A. Outside of the Task Environment

B. Outside of Long-term memory

C. In between Task Environment and Long-term memory (Pg. 51)

D. Is not apart of the Human Information Processing System

2. A way of testing the Limitations of Short-term memory is to:

A. Memorize a list of numbers and recite them without looking at the list (Pg. 53)

B. Memorize a list of numbers and recite them while looking at the list once every 15 seconds.

C. Memorize a list of numbers and recite them with your eyes closed

D. None of the above

3. The Semantic memory deals with:

A. Short-term memory

B. The “smart link” to the information developed

C. Contains indexing systems such as associative structures (Pg. 54)

D. Is not associated with recognition memory


1. Problem space is a component of long-term memory. False (Pg. 52)

2. Biases are caused by heuristic behaviors of humans. True (Pg. 55)

3. From broadest to most specific, the order social sciences is Social Studies, Economics, Finance, and Real Estate. True (Pg. 60)

4. Valuation Processes have little to no influence on value formation in property

markets. False (Pg. 61)

4. More experienced appraisers develop shortcuts and screening strategies when developing opinions of value. True (Pg. 62)

Ch. 4

Multiple Choice

1. Spatial Economics is:

A. Study of economic relationships over time

B. Study of economic relationships over space and time

C. Study of economic relationships over space (Pg. 67)

D. None of the above

2. The highest and best use of land:

A. Will always produce the highest return to a landowner.

B. Is described as one single land use (Pg. 71)

C. Is very difficult to determine

D. Has no relevance to Real Estate

3. An Economic Base, most simplistically, is a composition of:

A. A region’s local economy (Pg. 75)

B. Each country as a whole

C. Each state or province within a country

D. The wealthiest people in the world.


1. The Population-to-Employment ratio is one between an area and its total employment. True (Pg. 77)

2. The Sector Growth Model shows cities growing in an inward direction. False (Pg. 79)

3. A Competitive Advantage is a feature that is attractive to residents and businesses. True (Pg. 73)

4. Basic (or Export) Employment is not a good indicator of an area’s competitive advantage. False (Pg. 76)

5. All urban growth models are as equally useful, depending on the metropolitan area it’s exhibiting. True (Pg. 81)

Ch. 5

Multiple Choice

1. Time value of money deals with:

A. Equations used to discount and compound income-producing assets. (Pg. 88)

B. Equations used only to discount income-producing assets

C. Equations used only to compound income-producing assets

D. None of the above

2. The IRR:

A. Sometimes equates exact investment outflows

B. Never equates exact investment outflows

C. Always equates exact investment outflows (Pg. 93)

D. Deals only with inflows.

3. Someone who borrows money to purchase Real Estate is:

A. A mortgagee

B. A Lender

C. A mortgagor (Pg. 96)

D. Probably poor


1. Net Present Value is the compounded value of an income-producing asset. False (Pg. 107)

2. Discounting involves determining the present value. True (Pg. 89)

3. An Annuity does not always consist of equal periodic payments. False (Pg. 95)

4. An Amortization Schedule shows all payments made over the life of a loan. True (Pg. 100)

5. A Sinking Fund is created to set aside a constant payment over time that doesn’t grow. False (Pg. 105)

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