Chapter 5 The Mathematics of Real Estate Analysis

Questions and Answers.


1)                                A real estate borrower is a
A.      Mortgagor
B.      Mortgagee
C.      Banker
D.      All above


2)                                    The systematic reduction of debt through a series of scheduled principal repayments that lead eventually to the complete extinction of the loan.
A.      Amortization Schedule
B.      Annuity
C.      Amortization
D.      None above

3)                                        A specific type of income stream characterized by equal periodic payments over its life
A.      Compounding
B.      Discounting
C.      Annuity
D.      All above
  

T/F Question:
4)      The term “amortize” derives from the German language and means “to kill off”
·         T
·         F

5)      The term “Return of” is the portion of investment cash inflow designated as the interest earned on invested capital.
·         T
·         F

6)      NPV stands for Net present value
·         T
·         F

7)       IRR stands for Interest rate return
·         T
·         F

8)      Capital gains tax is collected from the equity position for capital gains arising from the sale of the property.
·         T
·         F

 1A, 2C, 3C, 4F, 5F, 6T, 7F, 8T