Question 1

Direct real estate investments include single-family dwellings,duplexes,apartments,undeveloped land,and commercial property.

Accepted Answer

A) True 
 B)False

Question 2

An example of a direct real estate investment is a:

Accepted Answer

A)  limited partnership.
B)  single-family dwelling.
C)  real estate syndicate.
D)  real estate investment trust.
E)  mortgage pool.F) D) and E)
G) B) and D)

Question 3

Investments in silver,platinum,palladium,and rhodium are not used as a hedge against inflation.

Accepted Answer

A) True 
 B)False

Question 4

A real estate syndicate provides professional management and unlimited liability for its members.

Accepted Answer

A) True 
 B)False

Question 5

A syndicate is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.

Accepted Answer

A) True 
 B)False  True

Question 6

Presently,you are required to use which method of depreciation in real estate investments?

Accepted Answer

A)  Sum-of-the-digits
B)  Straight-line
C)  Rule of 78s
D)  Last In First Out
E)  First In First OutF) C) and E)
G) B) and D)

Question 7

Federal law requires that no more than half the shares in a REIT may be owned by 15 or fewer people.

Accepted Answer

A) True 
 B)False

Question 8

If a gold bullion bar does not remain in the possession of the dealer or bank that sells it,what must happen before it can be resold?

Accepted Answer

A)  It must be made into coins.
B)  It must be pounded flat.
C)  It must be reassayed.
D)  It must be turned into jewelry.
E)  It must be taxed.F) A) and B)
G) A) and E)

Question 9

People primarily buy a vacation home for tax reasons according to one certified public accountant.

Accepted Answer

A) True 
 B)False  False

Question 10

Gross profit on a real estate transaction equals the selling price minus the purchase price.

Accepted Answer

A) True 
 B)False

Question 11

The primary reason people buy a vacation home is:

Accepted Answer

A)  to use as a family vacation retreat.
B)  for tax reasons.
C)  for rental income.
D)  for their grown children to live in.
E)  to eventually use it as their primary residence.F) B) and E)
G) B) and C)

Question 12

Unlike stocks and bonds,precious metals sitting in vaults earn no income.

Accepted Answer

A) True 
 B)False

Question 13

A limited partner cannot take part in the management of the partnership.

Accepted Answer

A) True 
 B)False

Question 14

David Harris has invested in something that acts like a mutual fund and that invests in both construction loans and real estate operating companies.This investment trades on the New York Stock Exchange.What type of investment has David made?

Accepted Answer

A)  Limited partnership
B)  Equity REIT
C)  Mortgage REIT
D)  Hybrid REIT
E)  Participation certificateF) A) and D)
G) B) and D)

Question 15

In 2011,which country was the world's largest producer of gold?

Accepted Answer

A)  China
B)  Australia
C)  U.S.
D)  Russia
E)  CanadaF) B) and D)
G) C) and D)

Question 16

About 90% of REITs are _____ REITs.

Accepted Answer

A)  equity
B)  mortgage
C)  hybrid
D)  participation
E)  governmentF) A) and E)
G) D) and E)

Question 17

Suppose you invested $10,000 of your own money and had a $90,000 mortgage with interest rate of 6.5 percent.After one year,you sell the property for $140,000.What is your gross profit?

Accepted Answer

A)  $10,000
B)  $90,000
C)  $130,000
D)  $50,000
E)  $40,000F) A) and B)
G) None of the above

Question 18

High interest rates depress gold prices,because they make it very expensive to carry gold as an investment.

Accepted Answer

A) True 
 B)False

Question 19

General partners in a real estate investment venture have liability for _____financial losses.

Accepted Answer

A)  none of the
B)  all of the
C)  some of the
D)  only exceptional
E)  impliedF) A) and B)
G) A) and C)

Question 20

According to the National Association of Realtors,home values nearly double every _____ years.

Accepted Answer

A)  5
B)  6
C)  7
D)  10
E)  11F) A) and E)
G) A) and D) D

Exam 17: Investing in Real Estate and Other Investment Alternatives

Direct real estate investments include single-family dwellings,duplexes,apartments,undeveloped land,and commercial property.

Correct AnswerverifiedShow Answer

An example of a direct real estate investment is a:

Correct AnswerverifiedShow Answer

Investments in silver,platinum,palladium,and rhodium are not used as a hedge against inflation.

Correct AnswerverifiedShow Answer

A real estate syndicate provides professional management and unlimited liability for its members.

Correct AnswerverifiedShow Answer

A syndicate is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.

Correct AnswerverifiedTrue

Presently,you are required to use which method of depreciation in real estate investments?

Correct AnswerverifiedShow Answer

Federal law requires that no more than half the shares in a REIT may be owned by 15 or fewer people.

Correct AnswerverifiedShow Answer

If a gold bullion bar does not remain in the possession of the dealer or bank that sells it,what must happen before it can be resold?

Correct AnswerverifiedShow Answer

People primarily buy a vacation home for tax reasons according to one certified public accountant.

Correct AnswerverifiedFalse

Gross profit on a real estate transaction equals the selling price minus the purchase price.

Correct AnswerverifiedShow Answer

The primary reason people buy a vacation home is:

Correct AnswerverifiedShow Answer

Unlike stocks and bonds,precious metals sitting in vaults earn no income.

Correct AnswerverifiedShow Answer

A limited partner cannot take part in the management of the partnership.

Correct AnswerverifiedShow Answer

David Harris has invested in something that acts like a mutual fund and that invests in both construction loans and real estate operating companies.This investment trades on the New York Stock Exchange.What type of investment has David made?

Correct AnswerverifiedShow Answer

In 2011,which country was the world's largest producer of gold?

Correct AnswerverifiedShow Answer

About 90% of REITs are _____ REITs.

Correct AnswerverifiedShow Answer

Suppose you invested $10,000 of your own money and had a $90,000 mortgage with interest rate of 6.5 percent.After one year,you sell the property for $140,000.What is your gross profit?

Correct AnswerverifiedShow Answer

High interest rates depress gold prices,because they make it very expensive to carry gold as an investment.

Correct AnswerverifiedShow Answer

General partners in a real estate investment venture have liability for _____financial losses.

Correct AnswerverifiedShow Answer

According to the National Association of Realtors,home values nearly double every _____ years.

Correct AnswerverifiedD

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False

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D