ARKANSAS BROKER PRACTICE
EXAM LEVEL 1 QUESTIONS WITH
CORRECT ANSWERS!!
1. Which broker action is an example of blockbusting?
A. Refusing to sell or rent to prospects because of race
B. Refusing to rent to families with children
C. Soliciting listings based on a fear of racial change in an area
D. Directing people to an area based on race - ANSWERC. Soliciting listings based
on a fear of racial change in an area
2. The phrase definite duration refers to a(n)
A. life estate.
B. estate for years.
C. estate at will.
D. periodic tenancy. - ANSWERB. estate for years.
An estate for years is a lease for a definite period.
3. A lease that automatically renews itself, in the absence of notice, would be a(n)
A. estate for years.
B. net lease.
C. month-to-month tenancy.
D. percentage lease. - ANSWERC. month-to-month tenancy.
A periodic tenancy that renews unless notice given by lessor or lessee to terminate
—generally 30 days.
4. C just sold a condominium for $80,000. This gave C a 20 percent profit on what C
paid. What did C pay?
A. $64,000
B. $66,666
C. $120,000
D. $662,800 - ANSWERB. $66,666.
The whole = the part ÷ rate; the part is $80,000 and the rate is 120% or 1.2 as a
decimal.
5. A property has a variety of liens against it. Which of the following deeds would
give the grantee the greatest protection against the existing liens?
,A. Gift deed
B. Quit claim deed
C. Warranty deed
D. Tax deed - ANSWERD. Tax liens are priority liens so tax sales generally wipe out
all junior liens.
6. A business wishes to increase its liquidity while reducing its long-term debt. This
would be possible with a
A. piggyback loan.
B. sale-leaseback.
C. wraparound loan.
D. nonconforming loan. - ANSWERB. sale-leaseback
7. In real estate, the term steering refers to
A. directing buyers to properties that best meet their needs.
B. engaging in the qualification process for buyers.
C. directing people to or away from areas based on their race, religion, or national
origin.
D. dividing apartment buildings into adult-only and family areas. - ANSWERC.
directing people to or away from areas based on their race, religion, or national
origin.
8. In a buyer's closing statement, the selling price is
A. a debit to the buyer.
B. a credit to the buyer.
C. assumed by the seller.
D. less the amount to be paid for commission. - ANSWERA. a debit to the buyer.
9. What deduction from income does a homeowner have for tax purposes?
A. Interest expense
B. Insurance cost
C. Depreciation
D. Maintenance expense - ANSWERA. Interest expense.
With some limitations, interest is deductible as well as property taxes.
10. The requirement that a booklet entitled Protect Your Family from Lead Paint be
given to buyers and lessees applies to
A. single-family homes only.
B. 1-4 residential units only.
C. all property built prior to 1968.
D. residential property built prior to 1978. - ANSWERD. residential property built prior
to 1978.
11. A requirement of a valid deed is that the deed be
, A. dated.
B. acknowledged.
C. recorded.
D. signed by the grantor. - ANSWERD. signed by the grantor.
It is presumed dated as of delivery. While it needs to be acknowledged to be
recorded, it is valid between the parties without recordation.
12. Which of the following is both a lien and an encumbrance?
A. A restrictive covenant
B. An easement
C. A lease
D. A mortgage - ANSWERD. A Mortgage.
It is a money charge (lien) as well as a charge or burden against the property.
13. To locate buyers for other properties, a broker advertised a property that was not
available but which would generate great interest. The broker's action violated
A. RESPA.
B. Truth-in-Lending.
C. ADA.
D. the Sherman Act. - ANSWERB. Truth-In-Lending.
Bait-and-switch advertising is a Truth-in Lending violation.
14. There is an inherent conflict of interest between the owner and the broker when
there is a(n)
A. exclusive-agency listing.
B. exclusive-right-to-sell listing.
C. net listing.
D. open listing. - ANSWERC. net listing.
The broker wants a sale at the highest price possible while owner wants a quick sale
that will meet his or her net.
15. The first step in the appraisal process is to
A. determine the highest and best use.
B. do a reconciliation.
C. define the problem.
D. determine land value. - ANSWERC. define the problem.
The appraiser must determine the interest to be appraised in what property and for
what purpose.
16. A property manager may properly refuse to rent a second floor apartment to a(n)
EXAM LEVEL 1 QUESTIONS WITH
CORRECT ANSWERS!!
1. Which broker action is an example of blockbusting?
A. Refusing to sell or rent to prospects because of race
B. Refusing to rent to families with children
C. Soliciting listings based on a fear of racial change in an area
D. Directing people to an area based on race - ANSWERC. Soliciting listings based
on a fear of racial change in an area
2. The phrase definite duration refers to a(n)
A. life estate.
B. estate for years.
C. estate at will.
D. periodic tenancy. - ANSWERB. estate for years.
An estate for years is a lease for a definite period.
3. A lease that automatically renews itself, in the absence of notice, would be a(n)
A. estate for years.
B. net lease.
C. month-to-month tenancy.
D. percentage lease. - ANSWERC. month-to-month tenancy.
A periodic tenancy that renews unless notice given by lessor or lessee to terminate
—generally 30 days.
4. C just sold a condominium for $80,000. This gave C a 20 percent profit on what C
paid. What did C pay?
A. $64,000
B. $66,666
C. $120,000
D. $662,800 - ANSWERB. $66,666.
The whole = the part ÷ rate; the part is $80,000 and the rate is 120% or 1.2 as a
decimal.
5. A property has a variety of liens against it. Which of the following deeds would
give the grantee the greatest protection against the existing liens?
,A. Gift deed
B. Quit claim deed
C. Warranty deed
D. Tax deed - ANSWERD. Tax liens are priority liens so tax sales generally wipe out
all junior liens.
6. A business wishes to increase its liquidity while reducing its long-term debt. This
would be possible with a
A. piggyback loan.
B. sale-leaseback.
C. wraparound loan.
D. nonconforming loan. - ANSWERB. sale-leaseback
7. In real estate, the term steering refers to
A. directing buyers to properties that best meet their needs.
B. engaging in the qualification process for buyers.
C. directing people to or away from areas based on their race, religion, or national
origin.
D. dividing apartment buildings into adult-only and family areas. - ANSWERC.
directing people to or away from areas based on their race, religion, or national
origin.
8. In a buyer's closing statement, the selling price is
A. a debit to the buyer.
B. a credit to the buyer.
C. assumed by the seller.
D. less the amount to be paid for commission. - ANSWERA. a debit to the buyer.
9. What deduction from income does a homeowner have for tax purposes?
A. Interest expense
B. Insurance cost
C. Depreciation
D. Maintenance expense - ANSWERA. Interest expense.
With some limitations, interest is deductible as well as property taxes.
10. The requirement that a booklet entitled Protect Your Family from Lead Paint be
given to buyers and lessees applies to
A. single-family homes only.
B. 1-4 residential units only.
C. all property built prior to 1968.
D. residential property built prior to 1978. - ANSWERD. residential property built prior
to 1978.
11. A requirement of a valid deed is that the deed be
, A. dated.
B. acknowledged.
C. recorded.
D. signed by the grantor. - ANSWERD. signed by the grantor.
It is presumed dated as of delivery. While it needs to be acknowledged to be
recorded, it is valid between the parties without recordation.
12. Which of the following is both a lien and an encumbrance?
A. A restrictive covenant
B. An easement
C. A lease
D. A mortgage - ANSWERD. A Mortgage.
It is a money charge (lien) as well as a charge or burden against the property.
13. To locate buyers for other properties, a broker advertised a property that was not
available but which would generate great interest. The broker's action violated
A. RESPA.
B. Truth-in-Lending.
C. ADA.
D. the Sherman Act. - ANSWERB. Truth-In-Lending.
Bait-and-switch advertising is a Truth-in Lending violation.
14. There is an inherent conflict of interest between the owner and the broker when
there is a(n)
A. exclusive-agency listing.
B. exclusive-right-to-sell listing.
C. net listing.
D. open listing. - ANSWERC. net listing.
The broker wants a sale at the highest price possible while owner wants a quick sale
that will meet his or her net.
15. The first step in the appraisal process is to
A. determine the highest and best use.
B. do a reconciliation.
C. define the problem.
D. determine land value. - ANSWERC. define the problem.
The appraiser must determine the interest to be appraised in what property and for
what purpose.
16. A property manager may properly refuse to rent a second floor apartment to a(n)
