IAAO 102 EXAM WITH CORRECT
QUESTIONS AND ANSWERS 2025
Anticipation - CORRECT-ANSWERSValue is created by the expectation of benefits to
be derived in the future
Substitution - CORRECT-ANSWERSthe prices, rents, and rates of return of property
tend to be set by the current prices, rents and rates of return for equally desire able
substitute properties.
Contribution - CORRECT-ANSWERSthe value of a component of real estate can be
measured by the amount it contributes to net operating income because net operating
income can be capitalized into value.
Market Value - CORRECT-ANSWERSmeans the most probable price which a property
should bring in a competitive and open market under all conditions.
5 Analysis Questions for Investors - - CORRECT-ANSWERS1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Leverage - CORRECT-ANSWERSborrowing of funds in hopes of earning a greater
return than the cost of the borrowed funds. This amount can be be negative, positive, or
neutral.
Mortgage - CORRECT-ANSWERSmost common type of financing for real estate.
Junior Mortgage - CORRECT-ANSWERStypical a second mortgage
QUESTIONS AND ANSWERS 2025
Anticipation - CORRECT-ANSWERSValue is created by the expectation of benefits to
be derived in the future
Substitution - CORRECT-ANSWERSthe prices, rents, and rates of return of property
tend to be set by the current prices, rents and rates of return for equally desire able
substitute properties.
Contribution - CORRECT-ANSWERSthe value of a component of real estate can be
measured by the amount it contributes to net operating income because net operating
income can be capitalized into value.
Market Value - CORRECT-ANSWERSmeans the most probable price which a property
should bring in a competitive and open market under all conditions.
5 Analysis Questions for Investors - - CORRECT-ANSWERS1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Leverage - CORRECT-ANSWERSborrowing of funds in hopes of earning a greater
return than the cost of the borrowed funds. This amount can be be negative, positive, or
neutral.
Mortgage - CORRECT-ANSWERSmost common type of financing for real estate.
Junior Mortgage - CORRECT-ANSWERStypical a second mortgage
