IAAO 102 EXAM 2026-2027 QUESTIONS AND
VERIFIED ANSWERS GRADED A+
A loan secured by real property featuring an interest rate that is constant for the
term of the loan is referred to as a
fixed-rate mortgage
A loan is made in which an existing loan is retained and an additional loan, larger
than the existing loan, is made. The new lender accepts the obligation to make
payments on the old loan. This is an example of what kind of mortgage?
Wraparound mortgage
From the tenant's standpoint, when economic rent exceeds contract rent the
difference is know as:
leasehold income
The rental income that a property would most probably command in the open
market is called:
Market rent
NOT an allowable expense from the appraiser's point of view:
depreciation
,Why does an appraiser prepare a reconstructed operating statement when using the
income approach?
to develop an estimated projection of expected income and expense that will reflect
the earning capacity of the property
The anticipated income from all operations of the property adjusted for vacancy
and collection losses, and miscellaneous income is called:
effective gross income
Best describes the amount of adjustment an appraiser should make for vacancy
allowance in property:
the amount will vary with each property
Net operating income minus debt service equals:
pre-tax cash flow
An allowance for vacancy and collection loss is usually estimated as a percentage
of:
potential gross income
, when calculating net operating income, what expense is NOT a proper deduction
from gross income?
income tax expense
A reconstructed statement of net operating income should include:
management charges
The equity dividend rate is measured against:
initial equity investment
What is needed to use the band-of-investment method of calculating a discount
rate:
-loan to value ratio
-rate for equity
-rate of debt
When estimating the value of a fee simple estate - what type of rent would be
used?
market rent
What is meant by the term discount rate?
VERIFIED ANSWERS GRADED A+
A loan secured by real property featuring an interest rate that is constant for the
term of the loan is referred to as a
fixed-rate mortgage
A loan is made in which an existing loan is retained and an additional loan, larger
than the existing loan, is made. The new lender accepts the obligation to make
payments on the old loan. This is an example of what kind of mortgage?
Wraparound mortgage
From the tenant's standpoint, when economic rent exceeds contract rent the
difference is know as:
leasehold income
The rental income that a property would most probably command in the open
market is called:
Market rent
NOT an allowable expense from the appraiser's point of view:
depreciation
,Why does an appraiser prepare a reconstructed operating statement when using the
income approach?
to develop an estimated projection of expected income and expense that will reflect
the earning capacity of the property
The anticipated income from all operations of the property adjusted for vacancy
and collection losses, and miscellaneous income is called:
effective gross income
Best describes the amount of adjustment an appraiser should make for vacancy
allowance in property:
the amount will vary with each property
Net operating income minus debt service equals:
pre-tax cash flow
An allowance for vacancy and collection loss is usually estimated as a percentage
of:
potential gross income
, when calculating net operating income, what expense is NOT a proper deduction
from gross income?
income tax expense
A reconstructed statement of net operating income should include:
management charges
The equity dividend rate is measured against:
initial equity investment
What is needed to use the band-of-investment method of calculating a discount
rate:
-loan to value ratio
-rate for equity
-rate of debt
When estimating the value of a fee simple estate - what type of rent would be
used?
market rent
What is meant by the term discount rate?
