FREE ASA Principles of Valuation Questions and Answers

Question 1

What is the primary goal of a valuation?

Accepted Answer

Determine market value

Answer

Estimate insurance coverage

Answer

Assess tax liability

Answer

Calculate rental income

Question 2

Which principle states that value is influenced by the cost to obtain an equally desirable substitute?

Accepted Answer

Substitution

Answer

Contribution

Answer

Anticipation

Answer

Change

Question 3

What is the definition of market value?

Accepted Answer

Most probable selling price

Answer

Highest price possible

Answer

Price dictated by seller

Answer

Value on last appraisal

Question 4

Which valuation approach is best for unique or limited-market properties?

Accepted Answer

Cost approach

Answer

Sales comparison approach

Answer

Income approach

Answer

Gross rent multiplier

Question 5

Which concept describes the impact of future benefits on value?

Accepted Answer

Anticipation

Answer

Balance

Answer

Conformity

Answer

Substitution

Question 6

What does the principle of contribution state?

Accepted Answer

Contribution determines value

Answer

Cost always equals value

Answer

Larger features contribute most

Answer

Depreciation adds value