FINA 366 final exam UPDATED ACTUAL Questions And Correct Answers
C
Terms in this set (62)
Which of the following types of loans are often used to Bridge Loan
provide short-term financing for "transitional" properties
(e.g., properties that are currently experiencing
heightened vacancies, or that need to be redeveloped or
renovated before they can be stabilized)?
In contrast to residential mortgage loans, most fixed-rate Yield Maintenance agreements
commercial mortgages do not allow borrowers to freely
prepay the principal on their loan. Which of the following
prepayment penalties ties the penalty that borrowers pay
to how far interest rates have declined since origination?
Construction loans are used to finance the costs LTV rations above 90 percent
associated with erecting the building or buildings on a
site. All of the following would be typical of a
construction loan EXCEPT:
In recent years, lenders have been unwilling to relieve "Bad boy carve-out" Clause
borrowers from personal liability in the event of fraud,
environmental problems, or unpaid property tax
obligations. Therefore, some lenders include a clause that
pierces the single-purpose borrowing entity to hold the
actual borrower liable in such instances. This clause is
commonly referred to as a:
If mortgage rates decline significantly, borrowers may Defeasance
decide to prepay the principal on their loan even if they
face prepayment penalties. One way that lenders protect
themselves from prepayments in such circumstances is by
requiring the borrower who prepays to purchase for the
lender a set of U.S. Treasury securities whose coupon
payments replicate the cash flows the lender will lose as
a result of the early retirement of the mortgage. This
process is referred to as:
Given the following information, calculate the price-FFO 9.83
multiple for the following
REIT:Net income: $1,200,000
Gain/losses from infrequent and unusual events: $0
Amortization of tenant improvements: $120,000
Amortization of leasing expenses: $75,000
Depreciation (real property): $2,675,000
Stock Price: $40
Market Capitalization: $40,000,000
, Given the following information, calculate the price-FFO 10.00
multiple for the following
REIT:Funds from Operation: $4,000,000
Stock Price: $40
Shares Outstanding: 1,000,000
Assume you have taken out a balloon mortgage loan for 2,196,447.59
$2,500,000 to finance the purchase of a commercial
property. The loan has a term of 5 years, but amortizes
over 25 years. Calculate the balloon payment at maturity
(Year 5) if the interest rate on this loan is 4.5%.
Given the following information, calculate the debt yield 12.5%
ratio on the following commercial property.
Estimated Net Operating Income in the first year:
$2,500,000
Debt service in the first year: $960,000
Loan amount: $20,000,000
Purchase price: $27,300,000
Suppose you are considering the purchase of an 9.00%
apartment building that has 12 units that can be rented
out at $1,050 per month. You have estimated operating
expenses and expected vacancy and collection losses
for the first year to be $35,700 and $30,240, respectively.
You also have estimated that you will be able to generate
an additional $3,840 in the first year from garage rentals
on the property. If the expected purchase price of the
property is $1,100,000 and you are planning on making a
10% down payment, calculate the debt yield ratio.
Real estate private equity funds have been used to high expected returns
facilitate investment across the risk-return spectrum. All
of the following are characteristics of investments by
core funds EXCEPT:
Direct investment in private commercial real estate pension funds
markets is a preferred means of ownership for the largest
institutional market participants. Which of the following
types of institutions rely on stable income from
commercial real estate properties to pay out retirement
benefits?
In recent years, a number of pooled ownership structures limited liability company
have emerged that have changed the analysis of
ownership form selection for many investors. Which of
the following ownership structures is generally used for
small, local investments that are marketed to accredited,
but non-institutional investors?
C
Terms in this set (62)
Which of the following types of loans are often used to Bridge Loan
provide short-term financing for "transitional" properties
(e.g., properties that are currently experiencing
heightened vacancies, or that need to be redeveloped or
renovated before they can be stabilized)?
In contrast to residential mortgage loans, most fixed-rate Yield Maintenance agreements
commercial mortgages do not allow borrowers to freely
prepay the principal on their loan. Which of the following
prepayment penalties ties the penalty that borrowers pay
to how far interest rates have declined since origination?
Construction loans are used to finance the costs LTV rations above 90 percent
associated with erecting the building or buildings on a
site. All of the following would be typical of a
construction loan EXCEPT:
In recent years, lenders have been unwilling to relieve "Bad boy carve-out" Clause
borrowers from personal liability in the event of fraud,
environmental problems, or unpaid property tax
obligations. Therefore, some lenders include a clause that
pierces the single-purpose borrowing entity to hold the
actual borrower liable in such instances. This clause is
commonly referred to as a:
If mortgage rates decline significantly, borrowers may Defeasance
decide to prepay the principal on their loan even if they
face prepayment penalties. One way that lenders protect
themselves from prepayments in such circumstances is by
requiring the borrower who prepays to purchase for the
lender a set of U.S. Treasury securities whose coupon
payments replicate the cash flows the lender will lose as
a result of the early retirement of the mortgage. This
process is referred to as:
Given the following information, calculate the price-FFO 9.83
multiple for the following
REIT:Net income: $1,200,000
Gain/losses from infrequent and unusual events: $0
Amortization of tenant improvements: $120,000
Amortization of leasing expenses: $75,000
Depreciation (real property): $2,675,000
Stock Price: $40
Market Capitalization: $40,000,000
, Given the following information, calculate the price-FFO 10.00
multiple for the following
REIT:Funds from Operation: $4,000,000
Stock Price: $40
Shares Outstanding: 1,000,000
Assume you have taken out a balloon mortgage loan for 2,196,447.59
$2,500,000 to finance the purchase of a commercial
property. The loan has a term of 5 years, but amortizes
over 25 years. Calculate the balloon payment at maturity
(Year 5) if the interest rate on this loan is 4.5%.
Given the following information, calculate the debt yield 12.5%
ratio on the following commercial property.
Estimated Net Operating Income in the first year:
$2,500,000
Debt service in the first year: $960,000
Loan amount: $20,000,000
Purchase price: $27,300,000
Suppose you are considering the purchase of an 9.00%
apartment building that has 12 units that can be rented
out at $1,050 per month. You have estimated operating
expenses and expected vacancy and collection losses
for the first year to be $35,700 and $30,240, respectively.
You also have estimated that you will be able to generate
an additional $3,840 in the first year from garage rentals
on the property. If the expected purchase price of the
property is $1,100,000 and you are planning on making a
10% down payment, calculate the debt yield ratio.
Real estate private equity funds have been used to high expected returns
facilitate investment across the risk-return spectrum. All
of the following are characteristics of investments by
core funds EXCEPT:
Direct investment in private commercial real estate pension funds
markets is a preferred means of ownership for the largest
institutional market participants. Which of the following
types of institutions rely on stable income from
commercial real estate properties to pay out retirement
benefits?
In recent years, a number of pooled ownership structures limited liability company
have emerged that have changed the analysis of
ownership form selection for many investors. Which of
the following ownership structures is generally used for
small, local investments that are marketed to accredited,
but non-institutional investors?
