IAAO 102 FINAL TEST 2026
QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Anticipation.
Answer: the underlying principle which provides the basis of the income
capitalization approach
◍ income divided by rate equals value.
Answer: the basic equation used in the income approach to value
◍ NOT a typical unit of comparison in the valuation of an apartment building.
Answer: price per acre
◍ Capitalization process.
Answer: The value of an income-producing property estimated by
converting anticipated benefits arising from the ownership of the income
producing property.
◍ Anticipation.
Answer: Principle where value is created by the expectation of benefits to be
derived in the future.
◍ Income approach to value.
Answer: -based on the principle of anticipation-translates the ability of
property to generate income into an indication of value-requires an estimate
of net operating income of property
◍ Value is created by the anticipation of.
Answer: future benefits
◍ capitalization is the process used to.
Answer: convert income into and 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.
Answer: 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?.
Answer: Wraparound mortgage
◍ Change.
Answer: Principle where investor's expectations of changes in income
levels, the expenses required to ensure income, and probable increases or
decreases in property that must be addressed and forecast.
◍ From the tenant's standpoint, when economic rent exceeds contract rent the
difference is know as:.
Answer: leasehold income
◍ NOT an allowable expense from the appraiser's point of view:.
Answer: depreciation
◍ Why does an appraiser prepare a reconstructed operating statement when
using the income approach?.
Answer: 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:.
Answer: effective gross income
◍ Best describes the amount of adjustment an appraiser should make for
vacancy allowance in property:.
Answer: the amount will vary with each property
◍ Net operating income minus debt service equals:.
Answer: pre-tax cash flow
QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Anticipation.
Answer: the underlying principle which provides the basis of the income
capitalization approach
◍ income divided by rate equals value.
Answer: the basic equation used in the income approach to value
◍ NOT a typical unit of comparison in the valuation of an apartment building.
Answer: price per acre
◍ Capitalization process.
Answer: The value of an income-producing property estimated by
converting anticipated benefits arising from the ownership of the income
producing property.
◍ Anticipation.
Answer: Principle where value is created by the expectation of benefits to be
derived in the future.
◍ Income approach to value.
Answer: -based on the principle of anticipation-translates the ability of
property to generate income into an indication of value-requires an estimate
of net operating income of property
◍ Value is created by the anticipation of.
Answer: future benefits
◍ capitalization is the process used to.
Answer: convert income into and 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.
Answer: 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?.
Answer: Wraparound mortgage
◍ Change.
Answer: Principle where investor's expectations of changes in income
levels, the expenses required to ensure income, and probable increases or
decreases in property that must be addressed and forecast.
◍ From the tenant's standpoint, when economic rent exceeds contract rent the
difference is know as:.
Answer: leasehold income
◍ NOT an allowable expense from the appraiser's point of view:.
Answer: depreciation
◍ Why does an appraiser prepare a reconstructed operating statement when
using the income approach?.
Answer: 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:.
Answer: effective gross income
◍ Best describes the amount of adjustment an appraiser should make for
vacancy allowance in property:.
Answer: the amount will vary with each property
◍ Net operating income minus debt service equals:.
Answer: pre-tax cash flow
