Real Estate Finance (Study Guide for the Real
Estate Finance Exam for the Texas Real Estate License)
The face amount of a bond is the: - Answer- Value of the bond at maturity
Which of the following are debt investments? - Answer- Bonds
An investor who is interested in the amount of money an investment will produce
is primarily concerned about the investments: - Answer- Yield
One way an investor can minimize the likelihood of suffering serious losses on her
investments is to: - Answer- Focus on investments with a high rate of return
Generally, the longer the loan term: - Answer- The higher the risk of loss
A lender received a return on a mortgage loan in a form of: - Answer- Interest
Gina bought her house 5 yrs ago for $250000. She's decided to move to the
country, so she puts the house up for sale. Todd buys it for $375000. Gina's profit
on the sale is the result of : - Answer- Appreciation
Which of these types of investments has the slowest rate of capital turnover? -
Answer- Real estate
Jenny has saved up $4000 over the past yr and she'd like to invest the money.
She's uncertain about the stability of her job, however, and she wants quick
access to her money in the event that she's laid off. - Answer- Liquidity
To protect the yields they expect from their loans, mortgage lenders sometimes
charge a penalty for: - Answer- Prepayment
The original principal amount of a mortgage loan is the: - Answer- Amount of the
lender's investment
Someone who buys an asset or a property interest in an asset is making a/an: -
Answer- Ownership investment
Mortgage loans are pooled together and sold on the secondary market as: -
Answer- Mortgage backed securities
, Real Estate Finance (Study Guide for the Real
Estate Finance Exam for the Texas Real Estate License)
Which of the following is NOT true of market interest rates? - Answer- High
market interest rates encourage refinancing
Stocks and bonds are traded in specialized markets that are regulated by the: -
Answer- Securities and Exchange Commission
Mortgage lenders screen loan applicants to evaluate the: - Answer- Risk of
default
Risk of loss
Interest rate risk
A mortgage lender's risk of loss relates to: - Answer- The likelihood that the
borrower will default on the loan
An investor invests money in expectation of a return on the investment.
Depending on the type of investment, the return may be anything of the following
except: - Answer- Depreciation
A certificate of indebtedness issued by a governmental body or a corporation is a:
- Answer- Bond
Which of the following statements about securities is true? - Answer- Securities
give the holder a property interest or a right to payment
The federal government's actions in raising revenue, spending money, and
managing debt are referred to as: - Answer- Fiscal policy
A federal deficit occurs when, in a given year, the federal government: - Answer-
Spends more than it receives in revenue
An unmarried homeowner may deduct mortgage interest on a loan to purchase a
first or second residence, up to a loan amount of: - Answer- $1,000,000
Which of the following is a type of deduction that an owner of income-producing
property can take, but a homeowner can't? - Answer- Depreciation deduction
, Real Estate Finance (Study Guide for the Real
Estate Finance Exam for the Texas Real Estate License)
The Federal Reserve System was created through the: - Answer- Federal Reserve
Act of 1913 and 1916
How many members of the Federal Reserve Board are there? - Answer- 7
Frequent and widespread bank panics led to the creation of the: - Answer-
Federal Deposit Insurance Corporation
Which of the following is NOT a tool the Federal Reserve System may use to
influence the economy? - Answer- Tax rates
The interest rate that a bank charges each other for overnight loans is the: -
Answer- Federal funds rate
A bank must keep a certain percentage of its deposits either in its own vault or on
deposit with the Federal Reserve Bank in order to comply with the Fed's: -
Answer- Reserve requirements
When a Fed buys and sells government securities, the transactions are known as:
- Answer- Open market operations
If the government wants to increase the money supply, it can: - Answer- Buy
government securities and decrease reserve requirements
When the Fed tried to control inflation by decreasing the money supply in the
early 1980s: - Answer- Interest rates went up sharply
Which of the following is not a component of the federal government's fiscal
policy? - Answer- Key interest rates
An unmarried taxpayer sells her principal residence and turns a large profit on the
transaction. How much of the gain is excluded from taxation? - Answer-
$250,000
Estate Finance Exam for the Texas Real Estate License)
The face amount of a bond is the: - Answer- Value of the bond at maturity
Which of the following are debt investments? - Answer- Bonds
An investor who is interested in the amount of money an investment will produce
is primarily concerned about the investments: - Answer- Yield
One way an investor can minimize the likelihood of suffering serious losses on her
investments is to: - Answer- Focus on investments with a high rate of return
Generally, the longer the loan term: - Answer- The higher the risk of loss
A lender received a return on a mortgage loan in a form of: - Answer- Interest
Gina bought her house 5 yrs ago for $250000. She's decided to move to the
country, so she puts the house up for sale. Todd buys it for $375000. Gina's profit
on the sale is the result of : - Answer- Appreciation
Which of these types of investments has the slowest rate of capital turnover? -
Answer- Real estate
Jenny has saved up $4000 over the past yr and she'd like to invest the money.
She's uncertain about the stability of her job, however, and she wants quick
access to her money in the event that she's laid off. - Answer- Liquidity
To protect the yields they expect from their loans, mortgage lenders sometimes
charge a penalty for: - Answer- Prepayment
The original principal amount of a mortgage loan is the: - Answer- Amount of the
lender's investment
Someone who buys an asset or a property interest in an asset is making a/an: -
Answer- Ownership investment
Mortgage loans are pooled together and sold on the secondary market as: -
Answer- Mortgage backed securities
, Real Estate Finance (Study Guide for the Real
Estate Finance Exam for the Texas Real Estate License)
Which of the following is NOT true of market interest rates? - Answer- High
market interest rates encourage refinancing
Stocks and bonds are traded in specialized markets that are regulated by the: -
Answer- Securities and Exchange Commission
Mortgage lenders screen loan applicants to evaluate the: - Answer- Risk of
default
Risk of loss
Interest rate risk
A mortgage lender's risk of loss relates to: - Answer- The likelihood that the
borrower will default on the loan
An investor invests money in expectation of a return on the investment.
Depending on the type of investment, the return may be anything of the following
except: - Answer- Depreciation
A certificate of indebtedness issued by a governmental body or a corporation is a:
- Answer- Bond
Which of the following statements about securities is true? - Answer- Securities
give the holder a property interest or a right to payment
The federal government's actions in raising revenue, spending money, and
managing debt are referred to as: - Answer- Fiscal policy
A federal deficit occurs when, in a given year, the federal government: - Answer-
Spends more than it receives in revenue
An unmarried homeowner may deduct mortgage interest on a loan to purchase a
first or second residence, up to a loan amount of: - Answer- $1,000,000
Which of the following is a type of deduction that an owner of income-producing
property can take, but a homeowner can't? - Answer- Depreciation deduction
, Real Estate Finance (Study Guide for the Real
Estate Finance Exam for the Texas Real Estate License)
The Federal Reserve System was created through the: - Answer- Federal Reserve
Act of 1913 and 1916
How many members of the Federal Reserve Board are there? - Answer- 7
Frequent and widespread bank panics led to the creation of the: - Answer-
Federal Deposit Insurance Corporation
Which of the following is NOT a tool the Federal Reserve System may use to
influence the economy? - Answer- Tax rates
The interest rate that a bank charges each other for overnight loans is the: -
Answer- Federal funds rate
A bank must keep a certain percentage of its deposits either in its own vault or on
deposit with the Federal Reserve Bank in order to comply with the Fed's: -
Answer- Reserve requirements
When a Fed buys and sells government securities, the transactions are known as:
- Answer- Open market operations
If the government wants to increase the money supply, it can: - Answer- Buy
government securities and decrease reserve requirements
When the Fed tried to control inflation by decreasing the money supply in the
early 1980s: - Answer- Interest rates went up sharply
Which of the following is not a component of the federal government's fiscal
policy? - Answer- Key interest rates
An unmarried taxpayer sells her principal residence and turns a large profit on the
transaction. How much of the gain is excluded from taxation? - Answer-
$250,000
