Copyright

Commercial Real Estate Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. If there is an abundance of properties available for an extended period, prices of commercial real estate will _____.

Question 2 2. The phase of commercial real estate cycle where economic growth may loosen or an over-development of commercial property resulting in weak occupancy rates and slow rental growth is _____.

Question 3 3. _____ property is real estate that is used for business purposes.

Question 4 4. The _____ phase of the commercial real estate cycle is when poor economic conditions lead to an over supply of properties, which cause occupancy rates to fall to a low point.

Question 5 5. Corporations often consider _____, when business establishment and relocation decisions are made.

Page 2

Question 6 6. The Federal Reserve achieves its monetary goals by doing which of the following?

Question 7 7. Which of the following is an inaccurate description of The Federal Reserve?

Question 8 8. What are some of the objectives of the Fed?

Question 9 9. Why does the Federal Reserve require commercial banks to maintain reserves with them?

Question 10 10. Which of the following is FALSE regarding the Federal Reserve?

Page 3

Question 11 11. What does the Consumer Price Index measure?

Question 12 12. If the Consumer Price Index rises from 101 to 104, which of the following statements is true?

Question 13 13. What is the real interest rate when the nominal interest rate on a bank checking account is 1%, and the rate of inflation is 2%?

Question 14 14. Which of the following statements is FALSE regarding inflation?

Question 15 15. If Mary's nominal income rises by 4%, while her real income fell by 2%, what happens to the level of prices?

Page 4

Question 16 16. Erika is taking reasonable steps to evaluate a real estate investment's assets, liabilities and potential. What is she performing?

Question 17 17. _____ is a legal document that traces a property from its original owners up to the present day.

Question 18 18. What type of property exchange might be eligible for consideration as a 1031 exchange?

Question 19 19. A(n) _____ allows investors to defer paying capital gains taxes so long as there has been an exchange to a like-kind property.

Question 20 20. A _____ analysis and _____ study is usually completed to analyze the financial benefits, marketability or possible disadvantages of an investment property.

Page 5

Question 21 21. The dominant reason why real estate investors purchase income-producing property is to:

Question 22 22. Some of the risks considered during the due diligence period of valuing income-producing properties are:

Question 23 23. A gross income multiplier is used to determine the _____ of an income-producing property.

Question 24 24. An income-producing property's value is related to its ability to produce:

Question 25 25. One benefit of the direct capitalization rate method is that it factors in:

Page 6

Question 26 26. A full market study of a local area should be conducted before seriously considering an investment property purchase. This analysis should include demographic information, population statistical information, the area's boundaries and land usage, transportation, utilities, economy, _____.

Question 27 27. An investment in _____ can be very risky for a novice investor, because it usually does not provide immediate cash flow and timing is important.

Question 28 28. Ed Investor wanted to purchase an investment property with three of his friends, one of whom wanted to open a restaurant, one who wanted to start a hair salon, and one who wanted to open a computer repair shop. The most likely type of investment property he should consider purchasing would be a _____.

Question 29 29. Preparing a short-term financial statement for a property to be considered for investment should be completed prior to purchasing a commercial investment property. That statement should include determining the potential gross income, the effective gross income, and _____.

Question 30 30. Some of the disadvantages of commercial real estate investment might include poor liquidity, higher risk, more management time and _____

Commercial Real Estate Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Alabama Real Estate Broker Pre-License Exam: Study Guide & Practice  /  Business Courses
Support