Chapter 9 Investing Activity

1. Cash Flow is the income from a real estate investment realized by the investor after vacancy and credit loss, all operating expenses, and debt service have been paid.
A. True
B. False

2. Monopoly; two suppliers in a particular market that have control over market prices, since there is no competition.

A. True
B. False

3.  Appreciation; The increase in asset value over a certain period.

A. True
B. False

4. Ratios are also used to evaluate investment risk.
A. True
B. False

5. The abbreviation "DS" stands for Debit Service

A. True
B. False

6. Which one of the following has nothing to do with Capital Gains Tax in Real Estate?
A. Less Value of the land
B. Net proceeds from sale
C. Value of improvements
D. Gold stock going down in value

7. Which are the benefits in Real Estate?
A. Cash flow
B. Psychic perks
C. Tax shelter
D. All of the above

8. _____ The likelihood of an occurrence of an unwanted event

A. Opportunity cost
B. Risk
C. Mortgage reduction
D. B& C

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