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IAAO 102 EXAM ACTUAL EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERS|AGRADE
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IAAO 102 EXAM ACTUAL EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERS|AGRADE
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Capitalization Process in Real Taken by: wamamalex10Estate 0% Score
1. In financing of a real estate, the cash provided by the buyer as part of the
purchase price, or by a tenant in real estate as an acquisition cost, is
commonly known as
commercial equity loans
equity funds
highly leveredged funds
borrowed funds
2. A partially amortized mortgage
has a margin as one of its components.
has a balloon payment at the end of the term.
is the same as a straight-term mortgage.
is paid off by equal level payments during the entire life of the loan.
3. Which type of financing allows a borrower to borrow money to purchase
both the home and home furnishings with one note?
Chattel mortgage
Blanket mortgage
Package mortgage
Purchase money mortgage
,4. A contract in which a purchaser of real estate agrees to pay a small portion of
the purchase price when the contract is signed, and additional sums at
intervals, until the amount specified in the contract until the total purchase
price is paid and the seller delivers the deed.
Land contract
Option contract
Void contract
Sale contract
5. When converting income into a value indication, with net income we
_______________, and with gross income we ________________________.
divide by a multiplier, multiply by a rate
divide by a rate, multiply by a multiplier
multiply by a multiplier, divide by a rate
multiply by a factor, divide by a rate
6. Strong competition often leads to oversupply and the reduction of price.
Which of the following best describes this cause and effect?
Excess profits breed ruinous competition
Business thrives on competition
Demand has caught up with supply
All of the above
,7. The most probable price which a property will bring in a competitive and
open market under all conditions requisite to a fair sale is:
transaction price.
most probable selling price.
market value.
investment value.
8. An open end mortgage is best defined as:
One which provides that the outstanding balance can be increased
in order to advance additional funds
The interest or value which an owner has in real estate
An attachment to a contract to guarantee performance
To give a thing as security without the necessity of giving up
possession of it
9. A principle that is basic to all three approaches to value is
Contribution
Variable proportions
Conformity
Substitution
10. The economic principle stating that the value of a property tends to be set
by the price that would be paid to acquire a property of similar utility and
desirability is
Balance
Externalities
, Substitution
Opportunity cost
11. Which of the following explains the expenses that fall under "Reserves for
Replacement"?
The cost of replacing short-lived items necessary to maintaining
current operations, divided by the life of the items
All expenses that are necessary to maintain the property's income
stream
All cost arising from depreciation of the building and its components
Money set aside to fund expansion.
12. Capitalization of income attributable to real property is BEST defined as
cost.
price.
present value of a property based upon its future benefits.
attractiveness and location.
13. Capital recapture is
return of the investment
return on the investment
the interest rate
the discount rate`
14. The amount in which contract rent exceeds market rent at the time of the
appraisal is known as:
contract rent
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