IAAO Course 102 - Quiz 1 COMPLETE Questions
And Correct Answers (Verified Answers) 2026
Capitalization is the process used to
convert income into an estimate of value
A loan secured by real property featuring an interest rate that is constant for the term of the loan
is referred to as a (an)
fixed-rate mortgage
The underlying principle providing the basis of the income capitalization approach is
anticipation
The basic equation used in the income approach to value is
income / Rate = value
A gross lease requires that in addition to the rent, the tenant must pay:
None of the Above
When market rent exceeds contract rent the difference is known as
deficit rent
The rental income that a property would most probably command if all the space were
continuously leased at current rental rates is more commonly referred to as the:
Market Rent
The anticipated income from all operations of the property adjusted for vacancy and collection
losses, and miscellaneous income is called
effective gross income
If an income property has an annual effective gross income of $64,000 with total expenses of
$30,000 and variable expenses of $17,000, what is the operating expense ratio?
0.47
In reconstructing an income statement for an apartment complex, you estimate that the potential
gross income is $500,000. The vacancy and collection loss allowance is 6 percent. If operating
expenses are $205,000, what is the operating expense ratio, rounded?
44 percent
And Correct Answers (Verified Answers) 2026
Capitalization is the process used to
convert income into an estimate of value
A loan secured by real property featuring an interest rate that is constant for the term of the loan
is referred to as a (an)
fixed-rate mortgage
The underlying principle providing the basis of the income capitalization approach is
anticipation
The basic equation used in the income approach to value is
income / Rate = value
A gross lease requires that in addition to the rent, the tenant must pay:
None of the Above
When market rent exceeds contract rent the difference is known as
deficit rent
The rental income that a property would most probably command if all the space were
continuously leased at current rental rates is more commonly referred to as the:
Market Rent
The anticipated income from all operations of the property adjusted for vacancy and collection
losses, and miscellaneous income is called
effective gross income
If an income property has an annual effective gross income of $64,000 with total expenses of
$30,000 and variable expenses of $17,000, what is the operating expense ratio?
0.47
In reconstructing an income statement for an apartment complex, you estimate that the potential
gross income is $500,000. The vacancy and collection loss allowance is 6 percent. If operating
expenses are $205,000, what is the operating expense ratio, rounded?
44 percent
