DCA Appraisal Methods & Valuation 2

Question 1

Which appraisal purpose typically yields the HIGHEST stated value for a diamond?

Accepted Answer

Insurance replacement appraisal

Answer

Insurance replacement appraisals reflect the retail replacement cost, which is typically the highest value assigned to a diamond.

Question 2

A diamond appraiser uses the 'comparable sales' approach. What data source is MOST reliable for retail replacement value?

Accepted Answer

Current retail price lists from comparable jewelers

Answer

Current retail price lists from comparable jewelers best reflect what a consumer would actually pay to replace a diamond at retail.

Question 3

When appraising a diamond set in a mounting, the appraiser should value the diamond:

Accepted Answer

Separately from the mounting using a 'stone-out' estimate

Answer

The diamond should be valued separately from the mounting using a stone-out estimate to accurately reflect each component's individual worth.

Question 4

What does 'fair market value' specifically mean in a gemological appraisal context?

Accepted Answer

The price at which a willing buyer and seller would transact with no compulsion

Answer

Fair market value is the price agreed upon by a willing, informed buyer and seller, neither under compulsion to act.

Question 5

A GIA grading report accompanies a diamond being appraised. How does the report affect the appraiser's role?

Accepted Answer

It provides a basis for grading but the appraiser must independently verify and assign value

Answer

A lab report aids grading confirmation but the appraiser must independently verify the stone's identity and assign a current market value.

(DCA) Certified Diamond Council of America Diamond Specialist Practice Test