Chater 7 Political and Legal Environments

 Questions and Answers.

1)                                A qualification on the fee simple interest.
A.      Perfect
B.      Personal property
C.      Real estate
D.      None above


2)                                    The rights of surviving joint tenants have in real property when a joint tenant dies.
A.      Subsurface rights
B.      Surface rights
C.      Right of survivorship
D.      None above

3)                                        The right to possess or use real property.
A.      Personal property
B.      Real estate
C.      Freehold estates
D.      Leasehold estate

  
T/F Question:
4)      The term “Fixture” is an item that was once personal property but has been affixed or adapted to the real property that it is now real property.
·         T
·         F

5)      The term “Air rights” is the ownership and usage rights to the space above land.
.        T
·         F

6)      Escheat involves dying with a valid will.
·         T
·         F
7)       ’Easement in gross’ is a specific limitation on the fee of simple estate interest.
·         T
·         F
8)      A ‘lease’ is the estate of a property owner who has leased the property to another person or organization.
·         T
·         F

 1D, 2C, 3D, 4T, 5T, 6F, 7F, 8F

Chapter 6: Real Estate Markets

Questions and Answers.

1)      An asset whose value is derived from the value of underlying assets that back it. Example in real estate is mortgage-backed securities and REIT shares.

A-     Efficiency

B-      Disintermediation

C-      Derivative

D-     Equilibrium market price

2)      That most productive use to which a property can be physically and legally dedicated, leading therefore, to its maximum value. It is that use by which the market prices the property.

A)     Situs

B)      Subprime market

C)      Maturity mismatch

D)     Highest and best use

3)      The investment market for whole mortgages and for mortgage-backed securities, as opposed to the primary mortgage market, where mortgages are created between lenders and borrowers.

A)     Mortgage securitization

B)      Mortgage-backed security

C)      Secondary mortgage market

D)     Non above

            T/F questions

4)      The term “Efficiency” is used to describe how quickly transaction prices within a market reflect relevant market information. T/F

        

5)      “Situs” is the unique location profile of a real estate site, including the quality of its exposure, accessibility to neighboring activities, and infrastructure.T/F

        

6)      “Mortgage securitization” is a derivative asset whose value is supported by a pool of mortgages and whose cash flow is derived from the debt service received from the mortgage pool. T/F

7)      The term “Subprime market” is the popular name for that market serving residential mortgage borrowers who do not qualify for standard hence prime mortgages. T/F

        

8)      A “Free Market” is a market that operates free from governmental or any other outside control; barriers to market participation are nonexistent. T/F

        

1C, 2D, 3C ,4T, 5T, 6F, 7T, 8T

Chapter 7. Political and Legal Environments

1. Authority created by the U.S. Constitution that enables states to pass powers to local governments. 
    States use this authority to give local governments the legal powers to exercise government right in
    land?
      A. Police Power    B.  Eminent Domain    C.  Public record    D. Enabling Act
2.  What is the owner's right to sue a government?
      A.  Condemnation   B.  Eminent Domain   C. Escheat      D. Due Process
3.  A government's right to make a financial claim on real property to fund governmental needs and
     service?
     A.  Taxation    B. Public use     C. Regulatory taking   D.   Escheat
4. A state government's right to take unclaimed property from a deceased person dying intestate and
    without immediate hiers.
     A. T
     B.  F
5. An item that was once personal property but has been affixed or adapted to the real property that it
    is now real property.
    A.  T
    B.  F
6. Ownership and usage usually don't have right to the space above land
    A. T.
    B.  F.
7. Encroachments is that unauthorized intrusions of a fixture or improvement by a neighboring
    property
    A.  T.
    B.  F.
8. Deed restriction is that a specific limitation on the fee simple estate interest.
    A.  T
    B.  F

Answer: D, D, A, A, A, B, A, A.

Chapter 6, Real Estate Markets

1.  What was the main financial structure product cause housing rupture in 2008?
          a. DVD     b.  MSG   c.  WTF  d. CDO
2.  What is the unique locational profile of a real estate site including the quality of its exposure and  
      accessibility to neighboring activities and infrastructure.
         a.  Highest and best use
         b. Situs
         c.  Extraordinary returns
         d.  Efficiency
3.  What was the purpose of establishment for Secondary mortgage market?
         a. Government sponsored enterprise
         b. Mortgage backed security
         c. Mortgage securitization
         d. An American Dream
4.  Alan Greenspan, the former chairman of the Federal Reserve of the United States could
     understand CDO Financial product?
      a.  T
      b.  F
5.  The Federal Reserve is the Federal Government agency?
      a.  T
      b.  F
6.  Real Estate market is perfectly competitive markets?
      a.  T
      b.  F
7.  Do you think the United States is the 100% capitalism nation?
      a.  T
      b.  F
8.  CDO stand for collateralized debt obligation
      a.  T
      b.  F

Answer   d, b, c, b, b, a, b, a,

Chapter 7 Questions

1)      The use of eminent domain for urban redevelopment is not a dangerous infringement of private property rights and should be done more often.

a.       True

b.      False

2)      The difference between a fixture and a trade fixture is that a fixture was once personal property that has been attached to real property that has become property and trade fixture is personal property that is used in a business.

a.       True

b.      False

3)      An encroachment occurs when someone occupies property without the owner’s permission and gains ownership interest in the property.

a.       True

b.      False

4)      A lien is a claim on real property as security for a debt or monetary obligation that can be placed on a property whenever you borrow money.

a.       True

b.      False

5)      The rights of surviving joint tenants have in real property when a joint tenant dies are called rights of survivorship.

a.       True

b.      False

6)      The concept of ________ comes from English common law in which unclaimed property of a deceased person (without a will or heirs) is taken by a government.

a.       Just compensation

b.      Escheat

c.       Reversion

d.      Encumbrance

7)      A freehold estate that ends upon the death of an individual.

a.       Life tenant

b.      Remainder

c.       Life estate

d.      Easement

8)      Because a property may have more than one lien, there is an order that determines the likelihood that a lienholder will be paid back. The order is as follows:

a.       Tax, second level, mortgage

b.      Mortgage, mechanics, tax

c.       First level, perfect, judgment

d.      Tax, mortgage, mechanics

 

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

Chapter 6 Questions

1)      Money market lenders are very passive members in the commercial paper market.

a.       True

b.      False

2)      There no solely responsible party to blame for the 2008 crisis.

a.       True

b.      False

3)      Freddie Mac and Fannie Mae were at one time government sponsored enterprises but have recently become government agencies.

a.       True

b.      False

4)      The concept of highest and best use can be described as the most productive use that a property can be physically and legally dedicated to, maximizing its value.

a.       True

b.      False

5)      Depository financial institutions face a challenge called maturity mismatch when long term investments are funded with short term liabilities.

a.       True

b.      False

6)      Real estate markets establish prices to:

a.       Inform real estate investment decisions

b.      Stimulate or discourage real estate development

c.       Allocate space among competing land uses

d.      Establish land use patterns

e.      All of the above

7)      Which of the following is NOT a characteristic of a perfectly competitive market:

a.       Product and input mobility

b.      A free market

c.       Fluctuating product

d.      Perfect knowledge

8)      The supply/demand conditions and property characteristics that create real estate value in the market for a space is called ________.

a.       Situs

b.      Economic fundamentals

c.       Secondary mortgage market

d.      Subprime market

 

 

 

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