CGA Appraisal Methodology & Report Writing 5

Question 1

When an appraiser uses comparable sales data from auction records to support a value conclusion, this is an example of which appraisal methodology?

Accepted Answer

Sales comparison approach

Answer

The sales comparison approach uses actual market transactions of comparable items to support value conclusions, and auction records are a recognized source of comparable sales data.

Question 2

A client asks a CGA to inflate an appraisal value for insurance purposes. The correct response is to:

Accepted Answer

Decline and explain that inflating values is unethical and potentially fraudulent

Answer

Inflating appraisal values for insurance constitutes fraud; the appraiser must decline and may be required to report the request under applicable professional standards.

Question 3

The term 'market level' in personal property appraisal refers to:

Accepted Answer

The tier of buyers and sellers in the distribution chain (retail, wholesale, secondary)

Answer

Market level identifies which point in the distribution chain is relevant — retail, wholesale, or secondary markets — each producing different value indications for the same item.

Question 4

An appraiser is asked to provide a 'verbal appraisal.' Under USPAP, which statement is TRUE?

Accepted Answer

Verbal appraisals are acceptable but still require a work file

Answer

USPAP permits oral appraisal reports but requires the appraiser to maintain a work file documenting the basis for the conclusions communicated verbally.

Question 5

Which component of a gemstone appraisal report provides the appraiser's professional credentials and qualifications?

Accepted Answer

The appraiser's certification and qualifications section

Answer

The appraiser's certification and qualifications section establishes the professional's credentials, education, and experience, lending credibility to the value conclusions.

(CGA) Certified Gemologist Appraiser Practice Test

(CGA) Certified Gemologist Appraiser Practice Test

CGA Appraisal Methodology & Report Writing 5