Free Principles of Investment Q&A

Which of the following statements is a true statement about points paid by a borrower for refinancing?

If a portion of the amount refinanced is used to improve the home, points could be deductible

Points paid to refinance a mortgage are never deductible in the year paid

Points paid to refinance a mortgage are fully deductible in the year paid

Points reduce the purchase price of the home

Correct! Wrong!

What's a promotional land sale?

A land gift giveaway with purchase of a new home

Promotion for at least one lot of land to be developed

A tax free land offering

Promotion for the sale of large tracts of land to be developed (at least 50 lots)

Correct! Wrong!

Gabriel, one of your clients, bought a rental home. He reviews the operating statement for his property, makes adjustments in light of his market-related information, and then reworks the statement. A/an ___________ has been produced by Gabriel.

Debt service statement

Operating income statement

Gross income statement

Pro-forma statement

Correct! Wrong!

What is meant by an association with numerous members who collaborate on real estate investments?

A corporation

An LLP

An LLC

A syndicate

Correct! Wrong!

What does I stand for in the capitalization formula?

Impact

Interest

Income

Investment

Correct! Wrong!

What happens as a result of inflation over time?

predictability

Interest becomes worth less money. The dollar's future value changes.

It decreases the value of money.

increased interest rates
decreased borrowing
decreased investing

Correct! Wrong!

Which of the following is subject to Securities and Exchange Commission regulations?

LLCs

Partnerships

LLPs

Syndicates

Correct! Wrong!

Hester has been looking for single-family homes on the outskirts of a business district and has been attending local planning meetings. Hester wants to invest, but what kind of opportunity?

A conversion

A historic property

A fixer-upper

A home targeted for rezoning

Correct! Wrong!

The best way to define the nominal interest rate is as the rate.

real

implicit

islam

stated

Correct! Wrong!

In order for a company to qualify for a school exemption under the Texas Economic Development Act, which of the following must be true?

The company must agree to pay back the school taxes over a period of seven years.

The company must prepay all school property taxes for the first two years of the eligibility period

The company must currently pay more than $20,000 in annual property taxes.

The tax exemption must be a deciding factor in the company's decision to do business in Texas.

Correct! Wrong!

Low- and medium-risk investments are more popular than high-risk investments because they

stated

it decreases the value of money.

low risk.

Correct! Wrong!

What is the definition of "before-tax cash flow"?

Cash flow before taking income taxes into account.

Cash flow before property taxes are considered.

Cash flow taking income taxes into account.

Correct! Wrong!

Christian, Meg's 16-year-old son, is the beneficiary of a deed to Meg's property because she is thinking of moving to a foreign nation. What has to happen for this transfer to be lawful?

Christian must agree to the transfer and sign the deed.

Meg must sign the deed and have her signature acknowledged.

Christian must provide monetary compensation to Meg.

Meg must wait until Christian has reached the age of majority.

Correct! Wrong!

What provision would be in the lease if the landlord wanted to inform the tenant that the rented property was backed by a mortgage?

Mortgage clause

Subordination clause

Subjective clause

Use clause

Correct! Wrong!

Cooperative shareholders under a condop structure have ______.

Flexibility in selling and restrictions on subletting, similar to that of condominium owners

Restrictions in selling and flexibility in subletting, similar to that of condominium owners

Flexibility in selling and subletting, similar to that of condominium owners

Restrictions on selling and subletting, similar to those of condominium owners

Correct! Wrong!

What is the real interest rate if the nominal interest rate is 4.00% and the inflation rate is 2.25%?

1.25%

1.00%

1.85%

1.75%

Correct! Wrong!

FREE Principles of Investment Questions and Answers

Which of the following statements is a true statement about points paid by a borrower for refinancing?

What's a promotional land sale?

Gabriel, one of your clients, bought a rental home. He reviews the operating statement for his property, makes adjustments in light of his market-related information, and then reworks the statement. A/an ___________ has been produced by Gabriel.

What is meant by an association with numerous members who collaborate on real estate investments?

What does I stand for in the capitalization formula?

What happens as a result of inflation over time?

Which of the following is subject to Securities and Exchange Commission regulations?

Hester has been looking for single-family homes on the outskirts of a business district and has been attending local planning meetings. Hester wants to invest, but what kind of opportunity?

The best way to define the nominal interest rate is as the rate.

In order for a company to qualify for a school exemption under the Texas Economic Development Act, which of the following must be true?

Low- and medium-risk investments are more popular than high-risk investments because they

What is the definition of "before-tax cash flow"?

Christian, Meg's 16-year-old son, is the beneficiary of a deed to Meg's property because she is thinking of moving to a foreign nation. What has to happen for this transfer to be lawful?

What provision would be in the lease if the landlord wanted to inform the tenant that the rented property was backed by a mortgage?

Cooperative shareholders under a condop structure have ______.

What is the real interest rate if the nominal interest rate is 4.00% and the inflation rate is 2.25%?

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