IAAO 112 EXAM
QUESTIONS AND
ANSWERS
apprai
sal process - answer- The is a systematic, logical method of collecting, analyzing, and
processing data into value estimates.
Definition of the problem - answer- is the first step in the appraisal process.
The ___________ of an appraisal is usually to estimate an opinion of a type of value,
most often __________ value. - answer- purpose, market
The type and extent of research and analyses in an appraisal or appraisal review
assignment is referred to as the _____________ - answer- scope of work.
In order to determine the appropriate scope of work an appraiser must properly
______________ to be solved. - answer- define (or identify) the problem
The four tests performed to determine the highest and best use of a property are: -
answer- physical possibility, legal permissibility, financial feasibility, and maximum
productivity.
7. All three approaches to value, the Cost Approach, the Sales Comparison Approach,
and the Income Approach must be developed in every appraisal. True or False -
answer- False
8. The worth of an investment property to a particular investor is:
, a. Value in use
b. Value in exchange
c. Investment value
d. Market value - answer- c. Investment value
The results of deducting expected vacancy and collection losses from potential gross
rent and then adding miscellaneous income is:
a. Net operating income
b. Fair rental value
c. Expense ratio
d. Effective gross income - answer- d. Effective gross income
Which capitalization method or methods uses the IRV equations:
a. Direct capitalization
b. Yield capitalization
c. Both
d. Neither - answer- c. Both
Investment criteria includes all but:
a. Profit
b. Risk
c. Supplies
d. Illiquidity - answer- c. Supplies
Investors are looking for a return ___ and a return ___ their capital. - answer- of and on
Which of the following is NOT a return on rate?
a. Interest rate
b. Discount rate
C. Yield rate
d. Recapture rate - answer- d. Recapture rate
The Principle of Anticipation states that value is the present worth of all the
________________ future benefits derived from a property. - answer- anticipated
A type of Mortgage usually depends on what five things? - answer- 1. Purpose of the
loan
2. Reliability of the borrower
3. Terms required (time, interest rate, and repayment schedule)
4. Amount of the loan
5. Priority of mortgage if the property is already encumbered
Leverage is the borrowing of funds in anticipation of earning a ____________ return
than the cost of the borrowed funds. Investors in real estate often can borrow money at
a lower rate than the overall property yoeld on the real estate investment. - answer-
greater
QUESTIONS AND
ANSWERS
apprai
sal process - answer- The is a systematic, logical method of collecting, analyzing, and
processing data into value estimates.
Definition of the problem - answer- is the first step in the appraisal process.
The ___________ of an appraisal is usually to estimate an opinion of a type of value,
most often __________ value. - answer- purpose, market
The type and extent of research and analyses in an appraisal or appraisal review
assignment is referred to as the _____________ - answer- scope of work.
In order to determine the appropriate scope of work an appraiser must properly
______________ to be solved. - answer- define (or identify) the problem
The four tests performed to determine the highest and best use of a property are: -
answer- physical possibility, legal permissibility, financial feasibility, and maximum
productivity.
7. All three approaches to value, the Cost Approach, the Sales Comparison Approach,
and the Income Approach must be developed in every appraisal. True or False -
answer- False
8. The worth of an investment property to a particular investor is:
, a. Value in use
b. Value in exchange
c. Investment value
d. Market value - answer- c. Investment value
The results of deducting expected vacancy and collection losses from potential gross
rent and then adding miscellaneous income is:
a. Net operating income
b. Fair rental value
c. Expense ratio
d. Effective gross income - answer- d. Effective gross income
Which capitalization method or methods uses the IRV equations:
a. Direct capitalization
b. Yield capitalization
c. Both
d. Neither - answer- c. Both
Investment criteria includes all but:
a. Profit
b. Risk
c. Supplies
d. Illiquidity - answer- c. Supplies
Investors are looking for a return ___ and a return ___ their capital. - answer- of and on
Which of the following is NOT a return on rate?
a. Interest rate
b. Discount rate
C. Yield rate
d. Recapture rate - answer- d. Recapture rate
The Principle of Anticipation states that value is the present worth of all the
________________ future benefits derived from a property. - answer- anticipated
A type of Mortgage usually depends on what five things? - answer- 1. Purpose of the
loan
2. Reliability of the borrower
3. Terms required (time, interest rate, and repayment schedule)
4. Amount of the loan
5. Priority of mortgage if the property is already encumbered
Leverage is the borrowing of funds in anticipation of earning a ____________ return
than the cost of the borrowed funds. Investors in real estate often can borrow money at
a lower rate than the overall property yoeld on the real estate investment. - answer-
greater
