REAE 3325 CH 1 EXAM QUESTIONS
AND ANSWERS (GRADED A)
When viewed as a tangible asset, real estate can be defined as the land and its
permanent improvements. Improvements on the land include:
fences
walkways
sewer systems
streets - ANSWER-fences
All of the following are examples of an improvement on the land EXCEPT:
fences.
building.
walls.
streets. - ANSWER-streets
Real estate is defined as land and its permanent improvements. Which of the following
is an example of an improvement to the land?
fence
building
sewer system
personal property - ANSWER-sewer system
Real estate is property, which can be either a tangible or an intangible asset. Which of
the following would be considered an intangible asset?
land
building
mortgage
fence - ANSWER-mortgage
Which of the following would be considered a tangible asset?
land
lease agreement
mortgage
listed REIT - ANSWER-land
If we desire to classify land by its use, land that does not include any improvements to
the land would be categorized as:
"raw" land.
building site.
developed land.
property infrastructure. - ANSWER-raw land
, If we desire to classify land by its use, land that consists of residential, industrial,
commercial, and institutional land uses would be classified as:
rural land.
federal land.
developed land.
undeveloped land. - ANSWER-developed land
According to the Department of Agriculture, which of the following land types constitutes
the lowest percentage of land use in the United States?
crop land
federal land and water areas
forest land
developed land - ANSWER-developed land
The size of a single family residential lot is typically:
less than one acre.
between one and two acres.
between two and three acres.
greater than three acres. - ANSWER-less than one acre
As of 2018, the single largest asset category in the net worth portfolios of households is:
government and corporate bonds.
stocks and mutual fund shares.
deposit and money market funds.
housing. - ANSWER-housing
Real estate values derive from the interaction of three different sectors in the economy.
Which of the following sectors serves to allocate financial resources among households
and firms requiring funds?
user market
capital market
government
property market - ANSWER-capital market
The demand for real estate derives from the need that market participants (e.g., owner
occupants, tenants, renters) have for shelter and convenient access to other locations.
This competition for physical location and space occurs in the:
user market.
capital market.
capital market.
property market. - ANSWER-user market
Based on your understanding of the supply and demand dynamics of user/space
markets, an increase in demand for leasable space would, all else equal, cause which
of the following effects?
decrease equilibrium rental rates and decrease property value
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