PSI Practice Test: Video 1 Answers (25 Questions) — Questions and Answers

Question 1: Federal laws about truth-in-lending are also called _____.

Regulation Z (Correct answer)
Title VIII
the Equal Credit Opportunity Act
the Freedom of Information Act

Correct answer: Regulation Z

Federal laws regarding truth-in-lending are commonly referred to as Regulation Z. This regulation implements the Truth in Lending Act (TILA), which mandates that lenders disclose key credit terms, such as the Annual Percentage Rate (APR) and finance charges, to consumers. Regulation Z aims to protect borrowers by ensuring transparency and allowing for informed credit decisions.

Question 2: How many brokers does an owner list the property within an exclusive right-to-sell listing?

Three
Any number
One (Correct answer)
Two

Correct answer: One

In an exclusive right-to-sell listing, the owner lists the property with only one broker. This type of agreement grants that single broker the sole right to sell the property during the listing period. The broker is entitled to a commission regardless of who finds the buyer, even if the seller finds the buyer themselves, offering the most protection to the listing broker.

Question 3: Under the Equal Credit Opportunity Act (ECOA), a lender may NOT discriminate based on which of the following?

Credit score
Debt-to-income ratio
Marital status (Correct answer)
Employment history

Correct answer: Marital status

ECOA prohibits credit discrimination based on marital status, race, sex, religion, national origin, age, or receipt of public assistance.

Question 4: Most of the time, a competitive market analysis is used to _____.

divorce proceedings
setting a listing price (Correct answer)
estate tax purposes
property tax assessment

Correct answer: setting a listing price

A competitive market analysis (CMA) is most frequently used by real estate agents to help sellers determine an appropriate listing price for their property. By comparing the subject property to recently sold, active, and expired listings of similar properties in the same area, a CMA provides an estimate of the property's current market value. This analysis helps sellers price their home competitively to attract buyers.

Question 5: Which of the following loan types does NOT require mortgage insurance regardless of the down payment amount?

Conventional loan with 10% down
FHA loan with 20% down
VA loan (Correct answer)
USDA Rural Development loan

Correct answer: VA loan

VA loans do not require monthly mortgage insurance premiums regardless of the down payment or LTV ratio, a significant benefit for eligible veterans.

Question 6: An agency relationship can be terminated by operation of law in which of the following circumstances?

The death of either the principal or agent (Correct answer)
The agent requests additional compensation
The contract term expires
The principal decides to hire a different agent

Correct answer: The death of either the principal or agent

Death of either the principal or agent automatically terminates the agency relationship by operation of law, without any notice required.

Question 7: Which of the following is NOT a required element for a valid contract?

Written documentation (Correct answer)
Consideration
Acceptance
Offer

Correct answer: Written documentation

A valid contract requires offer, acceptance, and consideration (plus capacity and legality), but most contracts do not need to be in writing to be enforceable.

Question 8: Which type of business entity offers limited liability to all owners while allowing pass-through taxation?

C-Corporation
General partnership
Sole proprietorship
Limited Liability Company (LLC) (Correct answer)

Correct answer: Limited Liability Company (LLC)

An LLC provides all members with limited liability protection while defaulting to pass-through taxation, avoiding the double taxation of a C-Corporation.

Question 9: What is the legal effect of a 'time is of the essence' clause in a real estate contract?

Deadlines become approximate guidelines
Missing the deadline is a material breach (Correct answer)
The contract is automatically void if the deadline is missed
Courts have discretion to extend the deadline

Correct answer: Missing the deadline is a material breach

A 'time is of the essence' clause makes strict compliance with deadlines a material term, so missing the deadline constitutes a material breach allowing the other party to terminate.

Question 10: Which of the following contracts falls within the Statute of Frauds and must be in writing to be enforceable?

A service contract completable within six months
A one-month lease for an apartment
A contract for the sale of goods worth $400
A contract for the sale of real property (Correct answer)

Correct answer: A contract for the sale of real property

Contracts for the sale of real property are within the Statute of Frauds and must be evidenced by a writing signed by the party to be charged.

Question 11: Which change control process step comes immediately after a change request is submitted?

Updating the project management plan
Implementing the approved change
Evaluating the impact of the proposed change (Correct answer)
Notifying all stakeholders of the change

Correct answer: Evaluating the impact of the proposed change

After submission, a change request must be analyzed for its potential impact on scope, cost, schedule, and quality before any decision is made.

Question 12: A project manager wants to execute two tasks simultaneously to shorten the schedule without adding resources. This technique is called:

Resource smoothing
Lead and lag adjustment
Fast tracking (Correct answer)
Schedule crashing

Correct answer: Fast tracking

Fast tracking overlaps activities that would normally be done sequentially, compressing the schedule without additional cost but increasing risk.

Question 13: What is the Internal Rate of Return (IRR)?

The rate of return required by senior management
The discount rate at which a project's NPV equals zero (Correct answer)
The percentage of budget used at project completion
The interest rate charged by the project's lenders

Correct answer: The discount rate at which a project's NPV equals zero

IRR is the discount rate that makes the net present value of all cash flows from a project equal to zero, used to compare project profitability.

Question 14: Which type of project dependency exists when one task cannot start until another has finished?

Finish-to-Finish (FF)
Start-to-Finish (SF)
Finish-to-Start (FS) (Correct answer)
Start-to-Start (SS)

Correct answer: Finish-to-Start (FS)

A Finish-to-Start dependency means the successor activity cannot begin until the predecessor has completed.

Question 15: In project communications management, what is a RACI matrix used for?

Tracking project risks and impacts
Defining roles and responsibilities for project tasks (Correct answer)
Scheduling project milestones
Mapping resource allocation across activities

Correct answer: Defining roles and responsibilities for project tasks

A RACI matrix clarifies who is Responsible, Accountable, Consulted, and Informed for each project activity.

Question 16: What is an employer's obligation under OSHA's Injury and Illness Recordkeeping rule when a work-related fatality occurs?

Report it within 8 hours to OSHA (Correct answer)
Only report it if requested during an OSHA inspection
File a written report within 30 days
Report it at the end of the calendar year

Correct answer: Report it within 8 hours to OSHA

OSHA requires employers to report all work-related fatalities to OSHA within 8 hours of learning about them, either by phone or online.

Question 17: What must employers provide at no cost to employees who have occupational exposure to bloodborne pathogens?

Personal health monitoring equipment
Health insurance covering hepatitis treatment
Hepatitis B vaccination series (Correct answer)
Annual blood tests and treatment if infected

Correct answer: Hepatitis B vaccination series

OSHA's Bloodborne Pathogens standard requires employers to offer the Hepatitis B vaccine series free of charge to all employees with occupational exposure.

Question 18: Which component of a personal fall arrest system (PFAS) connects the harness to the anchor point?

Body belt
Safety net
Lanyard or self-retracting lifeline (Correct answer)
Toe board

Correct answer: Lanyard or self-retracting lifeline

The lanyard or self-retracting lifeline (SRL) is the connecting component between the full-body harness and the anchor point in a personal fall arrest system.

Question 19: Under OSHA's scaffolding standard, what is the minimum width of a scaffold platform?

20 inches (Correct answer)
18 inches
24 inches
12 inches

Correct answer: 20 inches

OSHA 29 CFR 1926.451 requires scaffold platforms to be at least 18 inches wide, though 20 inches is the minimum for most supported scaffolds used by employees.

Question 20: Which of the following is a key element that must be included in an OSHA-compliant Emergency Action Plan?

Procedures for reporting fires and other emergencies (Correct answer)
A list of all chemicals used in the facility
Employee medical history records
Insurance information for property damage claims

Correct answer: Procedures for reporting fires and other emergencies

OSHA's EAP standard (29 CFR 1910.38) requires procedures for reporting emergencies, evacuation routes and procedures, and employee accounting methods after evacuation.

Question 21: Under personal auto insurance, 'uninsured motorist coverage' protects the insured when:

The insured is at fault in an accident
The at-fault driver has no liability insurance (Correct answer)
A family member is injured on private property
The insured's vehicle is stolen

Correct answer: The at-fault driver has no liability insurance

Uninsured motorist coverage pays for the insured's bodily injury damages caused by a driver who carries no liability insurance.

Question 22: Under the doctrine of 'reasonable expectations,' courts will interpret policy language in favor of:

The state insurance department's guidelines
Industry standard policy interpretations
The insurer's stated intent
The insured's reasonable understanding of coverage (Correct answer)

Correct answer: The insured's reasonable understanding of coverage

The reasonable expectations doctrine holds that coverage should align with what an average insured would reasonably expect the policy to provide.

Question 23: Which component of a fire insurance premium reflects the unique characteristics of a specific building?

Experience rate
Judgment rate
Schedule rate (Correct answer)
Class rate

Correct answer: Schedule rate

Schedule rating adjusts the base class rate up or down based on specific characteristics of the individual building being insured.

Question 24: What does the principle of indemnity prevent?

Insureds from filing fraudulent claims
Insureds from profiting from a loss (Correct answer)
Insurers from denying valid claims
Policies from lapsing due to nonpayment

Correct answer: Insureds from profiting from a loss

The principle of indemnity states that insurance should restore the insured to their pre-loss financial position, not allow them to profit.

Question 25: In risk management, 'risk avoidance' means:

Purchasing insurance to fund potential losses
Retaining financial responsibility for small losses
Reducing the frequency of losses through safety measures
Eliminating an activity or exposure that creates risk (Correct answer)

Correct answer: Eliminating an activity or exposure that creates risk

Risk avoidance involves completely eliminating the source of risk — for example, choosing not to engage in a particular activity.

PSI Practice Test: Video 1 Answers (25 Questions)

Federal laws about truth-in-lending are also called _____.

What Practice Test Geeks adds beyond an AI chat for PSI

An AI chatbot can quiz you, but it can't reproduce the exam conditions or keep your record. Here you get:

A timed, full-length PSI mock exam — 100 questions in 120 minutes with a 70% pass mark, modeled on the official exam's question count and time limit, followed by a score report broken down by exam domain.
A fixed PSI question bank: the same test every attempt, so your score is comparable from one try to the next instead of changing with every regenerated quiz.
Progress saved on your device: completed tests, scores and missed questions stay in My Progress, so you can retake only what you got wrong.
A printable PSI cheat sheet you can print or save as a PDF.
PSI flashcards built from the same question bank.

Start the Timed PSI Mock Exam →

These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

psiexams.com — Test delivery, eligibility, fees, retake policy, score release · verified Sep 2026