IAAO Course 102 Abbreviations Practice Test Questions
And Correct Answers (Verified Answers) 2026
1.
What does the Debt Coverage Ratio (DCR) measure in real estate assessment?
• A property's ability to generate enough income to cover its debt obligations.
• The total value of a property compared to its market price.
• The total income generated from a property before expenses.
• The ratio of a property's selling price to its assessed value.
2.
Describe the significance of Effective Gross Income (EGI) in the assessment of real estate
properties.
• Effective Gross Income (EGI) is significant because it reflects the actual income a
property generates after considering losses, providing a more accurate picture of its
financial performance.
• Effective Gross Income (EGI) is the total potential income without any deductions.
• Effective Gross Income (EGI) is used solely for tax purposes.
• Effective Gross Income (EGI) only considers rental income and ignores other revenue
sources.
3.
Describe the role of Net Operating Income (NOI) in evaluating a property's financial
performance.
• NOI is primarily used to assess the physical condition of a property.
• NOI reflects the income available to investors after operating expenses, serving as a key
indicator of a property's financial health.
• NOI is the total revenue generated by a property before any expenses are deducted.
• NOI includes all financial metrics related to a property, including debt service and taxes.
4.
What does the Overall Capitalization Rate (OAR) help estimate in real estate assessment?
And Correct Answers (Verified Answers) 2026
1.
What does the Debt Coverage Ratio (DCR) measure in real estate assessment?
• A property's ability to generate enough income to cover its debt obligations.
• The total value of a property compared to its market price.
• The total income generated from a property before expenses.
• The ratio of a property's selling price to its assessed value.
2.
Describe the significance of Effective Gross Income (EGI) in the assessment of real estate
properties.
• Effective Gross Income (EGI) is significant because it reflects the actual income a
property generates after considering losses, providing a more accurate picture of its
financial performance.
• Effective Gross Income (EGI) is the total potential income without any deductions.
• Effective Gross Income (EGI) is used solely for tax purposes.
• Effective Gross Income (EGI) only considers rental income and ignores other revenue
sources.
3.
Describe the role of Net Operating Income (NOI) in evaluating a property's financial
performance.
• NOI is primarily used to assess the physical condition of a property.
• NOI reflects the income available to investors after operating expenses, serving as a key
indicator of a property's financial health.
• NOI is the total revenue generated by a property before any expenses are deducted.
• NOI includes all financial metrics related to a property, including debt service and taxes.
4.
What does the Overall Capitalization Rate (OAR) help estimate in real estate assessment?
