Real Estate Finance Exam Questions with Complete Solutions Latest Update 2024
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Course
Real Estate Finance
Institution
Real Estate Finance
Real Estate Finance Exam Questions with Complete Solutions Latest Update 2024
The face amount of a bond is the: - Answers Value of the bond at maturity
Which of the following are debt investments? - Answers Bonds
An investor who is interested in the amount of money an investment will produce is...
Real Estate Finance Exam Questions with Complete Solutions Latest Update 2024
The face amount of a bond is the: - Answers Value of the bond at maturity
Which of the following are debt investments? - Answers Bonds
An investor who is interested in the amount of money an investment will produce is primarily concerned
about the investment's: - Answers Yield
One way an investor can minimize the likelihood of suffering serious losses on her investments is to: -
Answers Focus on investments with a high rate of return
Generally, the longer the loan term: - Answers The higher the risk of loss
A lender received a return on a mortgage loan in a form of: - Answers 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 : - Answers
Appreciation
Which of these types of investments has the slowest rate of capital turnover? - Answers 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. -
Answers Liquidity
To protect the yields they expect from their loans, mortgage lenders sometimes charge a penalty for: -
Answers Prepayment
The original principal amount of a mortgage loan is the: - Answers Amount of the lender's investment
Someone who buys an asset or a property interest in an asset is making a/an: - Answers Ownership
investment
Mortgage loans are pooled together and sold on the secondary market as: - Answers Mortgage backed
securities
Which of the following is NOT true of market interest rates? - Answers High market interest rates
encourage refinancing
Stocks and bonds are traded in specialized markets that are regulated by the: - Answers Securities and
Exchange Commission
Mortgage lenders screen loan applicants to evaluate the: - Answers Risk of default
Risk of loss
Interest rate risk
,A mortgage lender's risk of loss relates to: - Answers 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: - Answers Depreciation
A certificate of indebtedness issued by a governmental body or a corporation is a: - Answers Bond
Which of the following statements about securities is true? - Answers 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: - Answers Fiscal policy
A federal deficit occurs when, in a given year, the federal government: - Answers 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: - Answers $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? - Answers Depreciation deduction
The Federal Reserve System was created through the: - Answers Federal Reserve Act of 1913 and 1916
How many members of the Federal Reserve Board are there? - Answers 7
Frequent and widespread bank panics led to the creation of the: - Answers Federal Deposit Insurance
Corporation
Which of the following is NOT a tool the Federal Reserve System may use to influence the economy? -
Answers Tax rates
The interest rate that a bank charges each other for overnight loans is the: - Answers 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: - Answers Reserve requirements
When a Fed buys and sells government securities, the transactions are known as: - Answers Open
market operations
If the government wants to increase the money supply, it can: - Answers Buy government securities and
decrease reserve requirements
When the Fed tried to control inflation by decreasing the money supply in the early 1980s: - Answers
Interest rates went up sharply
, Which of the following is not a component of the federal government's fiscal policy? - Answers Key
interest rates
An unmarried taxpayer sells her principal residence and turns a large profit on the transaction. How
much of the gain is excluded from taxation? - Answers $250,000
Which of the following is not one of the responsibilities of the Federal Reserve System? - Answers Issue
interest-bearing securities
A Federal Reserve Bank is owned by: - Answers Member banks within its district
If the economy grows too quickly, what is likely to be the undesirable result? - Answers Inflation
Which of the following is set by each Federal Reserve Bank, with the approval of the Federal Reserve
Board? - Answers Discount rate
The Federal Open Market Committee could try to stimulate a sluggish economy by: - Answers Buying
government securities in an effort to reduce market interest rates
Reliable Savings Bank accepts deposits and originates loans for the purchase of homes. Reliable operates
in the : - Answers Primary market
A private investor purchases real estate loans from lenders throughout the country and pools them
together to serve as collateral for mortgage-backed securities. This occurs in the: - Answers Secondary
market
The economy is booming in Happyville and the population is growing. A potential problem for local
lenders might be that: - Answers There aren't enough funds on deposit to meet the increased demand
for new loans
A secondary market entity may do all of the following except: - Answers Originate loans
Which of the following is a secondary market entity? - Answers Federal National Mortgage Association
Which of the following is NOT an advantage that mortgage backed securities have over the direct
purchase of mortgage loans? - Answers Securities do not include servicing fees
An investment bank purchases mortgage loans and sells mortgage backed securities to investors. These
would be known as: - Answers Private label securities
What important function does the secondary market serve? - Answers It makes more funds available for
mortgage loans
It stabilizes local markets by moderating the effects of real estate cycles
A lender keeps a loan in portfolio if it: - Answers Retains the loan and receives payments from the
borrower
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