TEST REVIEW: IAAO 311 EXAM WITH
CORRECT QUESTIONS AND ANSWERS
2025
7 steps of the mass appraisal process - CORRECT-ANSWERSdefine problem, scope,
preliminary analysis, data collect, hbu, apply approaches, reconciliation.
model specification - CORRECT-ANSWERSexpresses those supply and demand factors
that best explain values in a specific market as an equation
model calibration - CORRECT-ANSWERSthe process of solving for unknown quantities
in a model
modern pricing theory - CORRECT-ANSWERSValue in exchange is determined by the
interaction of supply and demand. Any given market price will equalize the amount of a
good produced and the amount of that good purchased. An increase in home prices will
decrease the amount of homes purchased. Conversely, a decrease in prices will bring
more buyers into the market.
additive models - CORRECT-ANSWERSassume that the impact of property
characteristics upon value is independent and therefore can be added.
V = b0 + (b1 × X1) + (b2 × X2) + (b3 × X3)
multiplicative models - CORRECT-ANSWERSassume that the impact of property
characteristics upon value is interactive and should therefore be multiplied.
V = Ro × SIZE × F1 × F2 × F3
, hybrid/generic models - CORRECT-ANSWERScombine both the additive and
multiplicative structures. The hybrid model is the most flexible model structure; however,
it is also the most difficult to calibrate.
V = GQ × ((PI × QI) + (PL × QL) + OA)
IAAO Standards recommend that you conduct routine property inspections every -
CORRECT-ANSWERSsix years
Binary transformations reflect the levels of a discrete variable as - CORRECT-
ANSWERS1 or 0
Scalar transformation - CORRECT-ANSWERSconvert a discrete variable to relative
values or numerical ratings. a. This approach has the advantage of using one variable
rather than multiple dummy variables. Whenever possible, relative values are derived
through market analysis. b. Scalar variables normally center on "0" in additive models
and on "1" in multiplicative models. Scalar variables are also referred to as "linearized"
variables.
For example, cooling might be coded as follows: i. Central air conditioning = 1.00 ii.
Evaporative cooling = 0.50 iii. No cooling = 0
Logarithmic transformations - CORRECT-ANSWERSprovide another means of handling
nonlinear relationships in linear models; also useful for capturing economies of scale.
Market or economic areas - CORRECT-ANSWERSbroad geographic areas subject to
similar economic influences and value trends.
CORRECT QUESTIONS AND ANSWERS
2025
7 steps of the mass appraisal process - CORRECT-ANSWERSdefine problem, scope,
preliminary analysis, data collect, hbu, apply approaches, reconciliation.
model specification - CORRECT-ANSWERSexpresses those supply and demand factors
that best explain values in a specific market as an equation
model calibration - CORRECT-ANSWERSthe process of solving for unknown quantities
in a model
modern pricing theory - CORRECT-ANSWERSValue in exchange is determined by the
interaction of supply and demand. Any given market price will equalize the amount of a
good produced and the amount of that good purchased. An increase in home prices will
decrease the amount of homes purchased. Conversely, a decrease in prices will bring
more buyers into the market.
additive models - CORRECT-ANSWERSassume that the impact of property
characteristics upon value is independent and therefore can be added.
V = b0 + (b1 × X1) + (b2 × X2) + (b3 × X3)
multiplicative models - CORRECT-ANSWERSassume that the impact of property
characteristics upon value is interactive and should therefore be multiplied.
V = Ro × SIZE × F1 × F2 × F3
, hybrid/generic models - CORRECT-ANSWERScombine both the additive and
multiplicative structures. The hybrid model is the most flexible model structure; however,
it is also the most difficult to calibrate.
V = GQ × ((PI × QI) + (PL × QL) + OA)
IAAO Standards recommend that you conduct routine property inspections every -
CORRECT-ANSWERSsix years
Binary transformations reflect the levels of a discrete variable as - CORRECT-
ANSWERS1 or 0
Scalar transformation - CORRECT-ANSWERSconvert a discrete variable to relative
values or numerical ratings. a. This approach has the advantage of using one variable
rather than multiple dummy variables. Whenever possible, relative values are derived
through market analysis. b. Scalar variables normally center on "0" in additive models
and on "1" in multiplicative models. Scalar variables are also referred to as "linearized"
variables.
For example, cooling might be coded as follows: i. Central air conditioning = 1.00 ii.
Evaporative cooling = 0.50 iii. No cooling = 0
Logarithmic transformations - CORRECT-ANSWERSprovide another means of handling
nonlinear relationships in linear models; also useful for capturing economies of scale.
Market or economic areas - CORRECT-ANSWERSbroad geographic areas subject to
similar economic influences and value trends.
