Chapter 5 Questions

Chapter 5 Questions 

By Michael McMinassian

1.This process determines the Present Value of an income stream by applying appropriate time value of money concepts?
a.) Discounting
b.) Compounding
c.) Time Value
d.) IRR

2. This process is determining the Future Value of an income stream by applying appropriate time value of money concepts?
a.) Discounting
b.) Compounding
c.) Time Value
d.) NPV

3. This concept is developed around the arrangement that capital is entitled a return>
a.) Time Value Of Money
b.) Net Present Value
c.) Internal Rate Of Return
d.) Amortization

4.) An annuity is a specific type of income stream that has equal periods of payments. True or False.

5.) A mortgagor is a real estate. True or False.

6.) Return on refers to the portion of investment cash in flow designated as the interest earned on invested capital. True or False.

7.) An amortization schedule shows all payments made over the life of a loan. True or False.

8.) The IRR is the rate of return that exactly equates the investment outflows with the investment inflows. True or False.

KEY:
1.) a.
2.) b.
3.) a.
4.) t.
5.) f.
6.) t.
7.) t.
8.) t.

Chapter 5 By Albert Chang

1) Compounding is the process of determining the future value of an income stream by applying appropriate time value of money concepts. (T/F)

2)Present Value is the virtue of the power of money to earn interest, the value that an income-producing asset will enjoy at specific time in the future.(T/F)

3)The Internal rate of return is the rate return that exactly equates the investment outflows without the investment inflows.(T/F)

4)NPV stands for No Present Value (T/F)
5)Amortization is the systematic reduction of debt through a series of scheduled principal repayments that lead eventually to complete extinction of loan. (T/F)

6) What is Annuity?
a) specific type of income stream by equal periodic payemnts
b) the pay of a lump sum in a year
c) Pay twice a year
d) all the above

7)A real estate lender is
a) Mortgagor
b) Mortgagee
c) Mortgage
d) All the above

8)What is time value of money?
a) A portion investment of cash inflow
b) A real estate borrower
c) the concept developed around the argument that capital is entitled to a return
d) all the above

Answers:
1)T 2)F 3)F 4)F 5)T 6)A 7)B 8)C

Chapter 5 Questions

Lulu Carrizales

Chapter 5 Questions.

1. Net Present Value is used to analyze the profitability of an investment or project. (T/F)
   
2. An annuity and an annuity due have all the same components. (T/F)
    
3. A Perpetuity is a payment that does not stop (T/F)
   
4. An Annuity is the exact same payment over a finite period of time. (T/F)
   
5. "IRR" stands for Interior Return Rate (T/F)
   
6. The difference between an Annuity and an Annuity Due is:
   a)  At which point in the period that they payment is due (beg. or end)
   b)  The payment amount
   c)  Both a and b
   d)  None of the above.
    
7. If you lend someone $10,500 with a 10% interest rate over 5 years, how much would your FV be?
   
   a)  16,900
   b)  15,910
   c)  16,910
   d)  15,900
   
8. A ______ payment is taken in lieu of reoccurring payments that would usually be received over a period of time.
   
   a)  annuity
   b)  perpetuity
   c)  lump sum
   d)  None of the above.

Key:
1.  T
2.  F
3.  T
4.  T
5.  F
6.  A
7.  C
8.  C

Ch.6 Questions By Jazmin Padilla

Ch.6  Questions By Jazmin Padilla

1.       Real Estate markets creates prices in order to perform all of the following except

a.       Inform investment decisions

b.      Stimulate or discourage development

c.       Allocate space to the highest and best use

d.      Create a perfectly competitive market

2.       As the price of a good decreases, the demand of the good will probably increase. 

3.       The supply model is a positive relationship, as the price good increases suppliers are willing to supply more. 

4.       A perfectly competitive market has of the following characteristics except:

a.       Free market

b.      Perfect knowledge

c.       Heterogeneous product

d.      Critical mass of market participants

5.       Real estate markets are perfectly competitive markets.

6.       Suppliers cannot always keep up with fluctuation cycles and experience production lags. 

7.       The market for capital asset and investment occurs between the entrepreneur activity and the consumer activity. 

8.       The dilemma faced by many homeowners in which they owe more on their home then the actual value of the home, is known as

a.       Underwater homes

b.      Maturity mismatch

c.       Disintermediation

d.      Mortgage securitization

Answers: 1.D  2.T  3.T  4.C  5.F  6.T  7.F  8.A

Chapter 5 Questions by Arianna Sandoval

1.       A mortgagor is a real estate lender. T/F

2.       ____is the discounted value of an income-producing asset considering both cash inflows to the asset owner and cash outflows from the asset owner.

a)      Amortization

b)      Future Value

c)       Net Present Value

d)      Present Value

3.       ___ is when you want to compound the value of some amount of money today other than a single amount into the future?

a)      Present Value

b)      Lump Sum

c)       Annuity

d)      Net Present Value

4.       If you invest 100,000 today at 7.5% what will that investment be worth in 10 years?

a)      $106,115.16

b)      $200,103.20

c)       $206,103.16

d)      $-206,103.16

5.       The most important part of time value calculations is the time and interest rate. T/F

6.       Discounting is the process of determining the present value of a payment that is to be received in the future. T/F

7.       Receiving payment at the end of a period is also referred to as an ordinary annuity. T/F

8.       There are several problems with the IRR as a measure of return which includes not being able to tell you about the risk of the investment. T/F

Answers

1.       False

2.       D

3.       B

4.       C

5.       True

6.       True

7.       False

8.       True