Exam (elaborations)
Real Estate Finance: Questions / Answers
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Real Estate Finance: Questions / Answers
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Real Estate Finance: Questions / AnswersThe face amount of a bond is the: Correct Ans - Value of the bond at
maturity
Which of the following are debt investments? Correct Ans - Bonds
An investor who is interested in the amount of money an investment will
produce is primarily concerned about the investment's: Correct Ans -
Yield
One way an investor can minimize the likelihood of suffering serious losses on
her investments is to: Correct Ans - Focus on investments with a high
rate of return
Generally, the longer the loan term: Correct Ans - The higher the risk
of loss
A lender received a return on a mortgage loan in a form of: Correct Ans -
Interest
Gina bought her house 5 yrs ago for $250000. She's decided to move to the
country, so she puts the house up for sale. Todd buys it for $375000. Gina's
profit on the sale is the result of : Correct Ans - Appreciation
Which of these types of investments has the slowest rate of capital turnover?
Correct Ans - Real estate
Jenny has saved up $4000 over the past yr and she'd like to invest the money.
She's uncertain about the stability of her job, however, and she wants quick
access to her money in the event that she's laid off. Correct Ans -
Liquidity
To protect the yields they expect from their loans, mortgage lenders
sometimes charge a penalty for: Correct Ans - Prepayment
The original principal amount of a mortgage loan is the: Correct Ans -
Amount of the lender's investment
,Someone who buys an asset or a property interest in an asset is making a/an:
Correct Ans - Ownership investment
Mortgage loans are pooled together and sold on the secondary market as:
Correct Ans - Mortgage backed securities
Which of the following is NOT true of market interest rates? Correct Ans -
High market interest rates encourage refinancing
Stocks and bonds are traded in specialized markets that are regulated by the:
Correct Ans - Securities and Exchange Commission
Mortgage lenders screen loan applicants to evaluate the: Correct Ans -
Risk of default
Risk of loss
Interest rate risk
A mortgage lender's risk of loss relates to: Correct Ans - The likelihood
that the borrower will default on the loan
An investor invests money in expectation of a return on the investment.
Depending on the type of investment, the return may be anything of the
following except: Correct Ans - Depreciation
A certificate of indebtedness issued by a governmental body or a corporation
is a: Correct Ans - Bond
Which of the following statements about securities is true? Correct Ans -
Securities give the holder a property interest or a right to payment
The federal government's actions in raising revenue, spending money, and
managing debt are referred to as: Correct Ans - Fiscal policy
A federal deficit occurs when, in a given year, the federal government:
Correct Ans - Spends more than it receives in revenue
, An unmarried homeowner may deduct mortgage interest on a loan to
purchase a first or second residence, up to a loan amount of: Correct Ans -
$1,000,000
Which of the following is a type of deduction that an owner of income-
producing property can take, but a homeowner can't? Correct Ans -
Depreciation deduction
The Federal Reserve System was created through the: Correct Ans -
Federal Reserve Act of 1913 and 1916
How many members of the Federal Reserve Board are there? Correct Ans
- 7
Frequent and widespread bank panics led to the creation of the: Correct
Ans - Federal Deposit Insurance Corporation
Which of the following is NOT a tool the Federal Reserve System may use to
influence the economy? Correct Ans - Tax rates
The interest rate that a bank charges each other for overnight loans is the:
Correct Ans - Federal funds rate
A bank must keep a certain percentage of its deposits either in its own vault or
on deposit with the Federal Reserve Bank in order to comply with the Fed's:
Correct Ans - Reserve requirements
When a Fed buys and sells government securities, the transactions are known
as: Correct Ans - Open market operations
If the government wants to increase the money supply, it can: Correct Ans
- Buy government securities and decrease reserve requirements
When the Fed tried to control inflation by decreasing the money supply in the
early 1980s: Correct Ans - Interest rates went up sharply
Which of the following is not a component of the federal government's fiscal
policy? Correct Ans - Key interest rates
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