IAAO 102 ACTUAL EXAM PAPER 2026
QUESTIONS WITH ANSWERS GRADED
A+
◍ capitalization is the process used to:a) establish reproduction costb) establish
mortgage paymentsc) establish a depreciation schedule d) convert income
into an estimate of value.
Answer: d) 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):
A. adjustable-rate mortgage
B. fixed-rate mortgage
C. constant amortization mortgage
D. non-adjustable-rate mortgage.
Answer: b) fixed-rate mortgage
◍ The underlying principle providing the basis of the income capitalization
approach is:
A. Change
B. Balance
C. Conformity
D. Anticipation.
Answer: d) anticipation
◍ The basic equation used in the income approach to value is:
A. rate : income = value
B. income ÷ rate = value
C. rate × income = value
D. rate + income = value.
Answer: b) income ÷ rate = value
, ◍ A gross lease requires that in addition to the rent, the tenant must pay:
A. insurance and taxes
B. maintenance & utilities only
C. maintenance, utilities, insurance, and taxes
D. none of the above.
Answer: d) none of the above
◍ When market rent exceeds contract rent the difference is known as:
A. leased fee income
B. deficit rent
C. economic income
D. sandwich interest income.
Answer: B. deficit rent
◍ The rental income that a property would most probably command in the
open market is called:
A. net rent
B. gross rent
C. market rent
D. contract rent.
Answer: C. market rent
◍ Income Approach.
Answer: One of three approaches to value in which the appraiser derived a
value indication by converting anticipated benefits through ownership of
income producing property is the ________________
◍ The anticipated income from all operations of the property adjusted for
vacancy and collection losses, and miscellaneous income is called:
A. pre-tax income
B. net operating income
C. potential gross income
D. effective gross income.
Answer: D. effective gross income
QUESTIONS WITH ANSWERS GRADED
A+
◍ capitalization is the process used to:a) establish reproduction costb) establish
mortgage paymentsc) establish a depreciation schedule d) convert income
into an estimate of value.
Answer: d) 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):
A. adjustable-rate mortgage
B. fixed-rate mortgage
C. constant amortization mortgage
D. non-adjustable-rate mortgage.
Answer: b) fixed-rate mortgage
◍ The underlying principle providing the basis of the income capitalization
approach is:
A. Change
B. Balance
C. Conformity
D. Anticipation.
Answer: d) anticipation
◍ The basic equation used in the income approach to value is:
A. rate : income = value
B. income ÷ rate = value
C. rate × income = value
D. rate + income = value.
Answer: b) income ÷ rate = value
, ◍ A gross lease requires that in addition to the rent, the tenant must pay:
A. insurance and taxes
B. maintenance & utilities only
C. maintenance, utilities, insurance, and taxes
D. none of the above.
Answer: d) none of the above
◍ When market rent exceeds contract rent the difference is known as:
A. leased fee income
B. deficit rent
C. economic income
D. sandwich interest income.
Answer: B. deficit rent
◍ The rental income that a property would most probably command in the
open market is called:
A. net rent
B. gross rent
C. market rent
D. contract rent.
Answer: C. market rent
◍ Income Approach.
Answer: One of three approaches to value in which the appraiser derived a
value indication by converting anticipated benefits through ownership of
income producing property is the ________________
◍ The anticipated income from all operations of the property adjusted for
vacancy and collection losses, and miscellaneous income is called:
A. pre-tax income
B. net operating income
C. potential gross income
D. effective gross income.
Answer: D. effective gross income
