1. The risk that the purchasing power of investment incomes and values does not keep up with the cost of other goods and services is known as:
A. Financial Risk
B. Liquidity Risk
C. Management Risk
D. Inflation Risk
Answer is D- Inflation risk
2. The likelihood of an occurrence of an unwanted event is known as:
A: Opportunity Cost
B: Risk
C: Cash Flow
D: Market Risk
Answer is B-Risk
3. The increase in asset value over a certain period is known as:
A: Tax shelter
B: Appreciation
C: Depreciation
D: Adjusted Basis
Answer is: B- Appreciation
1. The difference between the return on the underlying assets and the cost of borrowed funds is known as Spread.
Answer:True
2. The reduction or amortization of the mortgage balance over time is known as Leverage.
Answer: False- Known as Mortgage Reduction
3. Investing in a variety of assets to spread risk and hopefully avoid large losses is known as pride of ownership.
Answer: False-known as diversification
4. A psychic benefit is a perk to owning real property that is difficult to quantify.
Answer: True
5. An oligopoly is one supplier in a particular market that has control over market prices since there is no competition.
Answer: False- Known as a Monopoly
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