CAE Assessment and Evaluation 2

Question 1

In an assessment ratio study, how is the individual assessment ratio for a sold property calculated?

Accepted Answer

Assessed value divided by sale price

Answer

The assessment ratio is the appraised or assessed value divided by the adjusted sale price.

Question 2

Under IAAO ratio study standards, what range is acceptable for the overall median assessment ratio when the legal standard is market value?

Accepted Answer

0.90 to 1.10

Answer

IAAO recommends that the overall level of appraisal, measured by the median, fall between 0.90 and 1.10.

Question 3

What does the coefficient of dispersion (COD) measure in a ratio study?

Accepted Answer

The average percentage deviation of ratios from the median ratio

Answer

COD expresses the average absolute deviation from the median as a percentage of the median, which measures uniformity.

Question 4

A jurisdiction's price-related differential (PRD) is 1.08. What does this most likely show?

Accepted Answer

Assessment regressivity, where low-value properties are over-assessed relative to high-value ones

Answer

A PRD above about 1.03 suggests regressivity, meaning lower-value properties carry higher ratios.

Question 5

For which property type is the cost approach usually the most reliable valuation method?

Accepted Answer

New construction or special-purpose properties with few sales

Answer

The cost approach works best when depreciation is small or when comparable sales and income data are scarce.

CAE - Certified Assessment Evaluator Practice Test