Chpt. 9 Multiple Choice & True/False Questions

Multiple Choice

1) Which of these isn't a major category of real estate risk?

a) Management risk

b) Investing risk

c) Liquidity risk

d) Inflation risk

2) Which of these isn't a benefit of investing in real estate?

a) Opportunity cost

b) Tax shelter

c) Psychic perks

d) Leverage

3) Which of these is not a requirement for a 1031 exchange?

a) Identify the property for exchange before closing

b) Identify replacement property within 45 days of closing

c) Acquire the replacement property within 190 days of closing

d) Use a qualified intermediary to facilitate the transaction

True/False

1) Investing is the pursuit of a future return by delaying consumption and taking an anticipated, desired level of risk. T/F

2) The buyers' costs associated with real estate include opportunity and transportation costs. T/F

3) On the risk continuum scale, a new development would be associated with a low level of risk. T/F

4) A tax shelter is a good way to reduce the amount of taxable income a person has. T/F

5) When depreciating property, you must depreciate both the land value and the improvement value. T/F

Answers

1) b

2) a

3) c - 180 days

1) T

2) T

3) F

4) T

5) F