Property Management Exam Practice Tests
Course Introduction
Property Management explores the principles and practices involved in effectively managing residential, commercial, and industrial real estate. The course covers key topics such as tenant relations, leasing, building maintenance, risk management, budgeting, legal and regulatory compliance, and the use of technology in property operations. Students will learn strategies for maximizing property value and profitability, gaining skills essential for working as property managers, asset managers, or real estate professionals. Real-world case studies and simulations provide practical experience in handling day-to-day challenges and strategic decision-making in property management.
Recommended Textbook
Real Estate Finance Theory and Practice 6th Edition by
Terrence M. Clauretie
Available Study Resources on Quizplus
22 Chapters
473 Verified Questions
473 Flashcards
Source URL: https://quizplus.com/study-set/3509 Page 2
Chapter 1: Finance and Real Estate
Available Study Resources on Quizplus for this Chatper
13 Verified Questions
13 Flashcards
Source URL: https://quizplus.com/quiz/69725
Sample Questions
Q1) The secondary mortgage market:
A) is called secondary because it is less important than the primary mortgage market
B) is where an investor goes after the primary mortgage market has turned down his request for credit
C) increases liquidity risk due to its inefficiency
D) purchases and sells mortgages that have been previously originated by other lenders
Answer: D
Q2) Capital markets:
A) deal in long-term securities
B) deal in short-term Treasury bills and long-term Treasury bonds to finance their deficits
C) rarely are involved in real estate transactions
D) consider mortgages only for short-term,interim financing
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Money Credit and the Determination of Interest
Rates
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/69724
Sample Questions
Q1) The liquidity effect:
A) refers to the initial short-term effect of a decrease in the money supply when interest rates rise
B) refers to the initial short-run effect of an increase in the money supply on interest rates
C) decreases the amount of excess cash individuals hold when interest rates drop D) has no effect on the demand for bonds
Answer: B
Q2) The interest rate on a default - free bond would be the same as the real rate when: A) inflationary expectations are zero
B) it is at its lowest of all time and remains constant
C) it is at its highest
D) there is a balanced budget
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Finance Theory and Real Estate
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/69723
Sample Questions
Q1) An asset is priced efficiently when:
A) some individuals can make excess returns using publicly available information
B) no one individual can make an excessive return with public information
C) any investor can make an excessive return with information only available to him or her
D) no investor can make an excessive return with information not available to everyone
Answer: B
Q2) A call option on a mortgage is:
A) the homeowner's right to prepay the current balance prior to its maturity
B) the lender's right to foreclose in the event of default
C) the homeowner's right to take a second mortgage out on the equity in the home
D) the lender's right to resell the mortgage to another lender
Answer: A
Q3) For commercial property,a larger down payment is often required; this:
A) increases the value of the put option
B) increases the value of the call option
C) reduces the value of the call option
D) reduces the value of the put option
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: The Early History of Residential Finance and
Creation of the Fixed Rate Mortgage
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/69722
Sample Questions
Q1) A discount point is:
A) one percent of the original loan balance
B) determined only at the loan closing
C) the same as the origination fee
D) none of the above
Q2) A prepayment penalty in a mortgage has the effect of ________ the APR.
A) increasing
B) decreasing C) doesn't affect
D) cannot determine the effect
Q3) Suppose your FRM monthly payment is $1048.82 with terms of 7.5% for 30 years.How much did you originally borrow?
A) $377,575
B) $150,000
C) $376,575
D) $1,413,228
E) cannot be determined
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Modern Residential Finance
Available Study Resources on Quizplus for this Chatper
4 Verified Questions
4 Flashcards
Source URL: https://quizplus.com/quiz/69721
Sample Questions
Q1) Disintermediation refers to:
A) the withdrawal of funds from financial institutions by depositors in excess of deposits
B) financial institutions withdrawing from the Federal Reserve System
C) financial institutions shifting from FHA loans to conventional loans
D) none of the above
Q2) A maturity mismatch occurs when:
A) over one half of all mortgage debt is held by depository institutions
B) mortgage loan interest rates are high
C) a financial institution has originated more conventional loans than government insured loans
D) there is a large difference in the maturity of a financial institutions assets and liabilities
Q3) Negative amortization refers to the fact that:
A) the balance of a loan grows larger rather than smaller
B) the amount of interest on a loan becomes larger rather than smaller
C) the reduction in the value of a property falls below the loan amount
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Alternative Mortgage Instruments
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/69720
Sample Questions
Q1) With a Reverse Annuity Mortgage:
A) the borrower receives monthly payments and makes a large repayment at the end of the mortgage term
B) the loan amount greatly exceeds the value of the house
C) the payments are designed for young couples purchasing their first house
D) the rate is adjusted every six months
Q2) Suppose you have a 30-year ARM with an original loan balance of $125,000,monthly payment in year one of $874.02 and monthly payment in year two of $1003.36,and a contract rate in year two of 9%.If the loan is repaid at the end of year two,what amount of discount points should the lender have charged to earn an effective yield of 10.17%?
A) 2.85 points
B) 3.51 points
C) 3.75 points
D) 8.22 points
E) 9.18 points
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Financing and Property Values
Available Study Resources on Quizplus for this Chatper
3 Verified Questions
3 Flashcards
Source URL: https://quizplus.com/quiz/69719
Sample Questions
Q1) Mortgage Revenue Bonds,a class of bonds called municipals,are issued by state and local governments and:
A) allow the government to purchase property for government use
B) provide an interest rate at a higher rate than corporate bonds
C) provide interest that is free of federal taxation
D) provide interest that is free from capital gains taxation
Q2) The term "carryback financing" refers to:
A) a motivated seller who takes back a note at a low rate in order to sell the property
B) a situation where the lender takes the property back after a default on the loan
C) an assumable loan in which a lender waives the discount points in order to complete the loan transaction
D) an assumable FHA loan
Q3) The term "cash equivalent" value refers to:
A) the value of a residential property while it is listed
B) the amount of discount points charged by a lender
C) the value of a property if sold for all cash
D) the cash equivalency of the mortgage on a property
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Federal Housing Policies: Part 1
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/69718
Sample Questions
Q1) The flat-rate insurance provided by the FDIC has two faults.First,it misprizes risk.Second,
A) it penalizes large thrifts by making them subsidize smaller ones by paying the same rate
B) it forces conservatively managed thrifts to subsidize those with more risky investments
C) it is not adjustable to reflect the actual market conditions that are met by commercial financial institutions
D) the rates are too high to be paid by a thrift without a large number of depositors
Q2) Escrow accounts are designed to:
A) ensure that the property taxes and hazard fees are current
B) ensure the borrower that no other party can claim ownership or title to the property
C) provide for the payment of all closing costs
D) ensure that the mortgage insurance and title insurance are paid.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Federal Housing Policies: Part 2
Available Study Resources on Quizplus for this Chatper
12 Verified Questions
12 Flashcards
Source URL: https://quizplus.com/quiz/69717
Sample Questions
Q1) The practice of designating an area in which a lender will not make a conventional mortgage loan is known as:
A) redlining
B) blockbusting
C) FHAing
D) zoning
Q2) Which of the following statements is incorrect in relation to the ECOA?
A) non-discriminatory firms will attain a competitive advantage
B) lenders are engaged in little discrimination
C) the ECOA has had a significant impact on making credit available
D) the ECOA is a valuable statement about principles of fair lending practices
Q3) One method of defining or identifying discriminating lending behavior is that discrimination is said to exist if minority group members represent a smaller proportion of those receiving credit than they do in the general population.This is known as the:
A) effects method
B) intent method
C) practices method
D) screening method
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: The Secondary Mortgage Market
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69716
Sample Questions
Q1) 10-17.Players that facilitate transactions in the secondary market include:
A) government National Mortgage Association
B) federal National Mortgage Association
C) private firms
D) all of the above
E) a and b
Q2) Ginnie Mae:
A) purchases mortgages
B) issues securities
C) both a and b
D) none of the above
Q3) 10-22.In 1938 Congress established as a unit of the Reconstruction Finance Corporation the:
A) Government National Mortgage Association.
B) Federal National Mortgage Association.
C) Federal Home Loan Mortgage Corporation.
D) Housing and Home Finance Agency
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Valuation of Mortgage Securities
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/69715
Sample Questions
Q1) 11-15.Which of the following is true?
A) even a slight increase in the default rate of a sinking fund has a dramatic impact on its balance
B) a large increase in the initial amount of over-collateralization has a minimal impact on the terminal fund balance
C) an increase in the yield on a sinking fund has a negative effect on the fund balance
D) the fund balance will rise with decreases in the PSA prepayment rate
Q2) The revenues associated with servicing loans include all except:
A) the servicing fee
B) the float on escrow accounts
C) the float between the receipt of monthly payments and the payment of proceeds to the purchaser of the loans
D) the administrative and overhead costs associated with servicing the pool
Q3) 11-22.An increase in the market rate of interest will:
A) slow the prepayment rate on discounted passthroughs
B) slow the prepayment rate on premium passthroughs
C) both a and b
D) will not affect either a or b because of the price compression theory
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Controlling Default Risk Through Borrower
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/69714
Sample Questions
Q1) A homeowner with negative equity in his or her house will:
A) always default
B) never default
C) sometimes default
D) default is not related to negative equity
Q2) 12-13.The provisions of a deed of trust outline the rights and obligations of the:
A) lender
B) borrower
C) trustor
D) all of the above
Q3) 12-34.The number of states that require that first mortgages be non-recourse through anti-deficiency judgment legislation are:
A) all,at present
B) six,at present
C) twelve,at present
D) all states except Hawaii
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Loan Origination, Processing, and Closing
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/69713
Sample Questions
Q1) The following is NOT considered a stage in the appraisal process:
A) ordering the appraisal
B) signing the appraisal
C) monitoring the appraisal
D) evaluating the appraisal
Q2) 13-35.The record of fees,charges,and payments at the closing is called:
A) commitment
B) truth-in-lending disclosure
C) deed
D) settlement statement
Q3) 13-15.A promissory note represents:
A) the borrower's promise to obtain the loan
B) the borrower's promise to repay the loan
C) a deed
D) a commitment to be a part of the closing file
Q4) 13-32.For FHA loans a lender can do virtually all of the underwriting under the:
A) verification of indebtedness program
B) loan processing program
C) direct endorsement program
D) mortgage banking program
To view all questions and flashcards with answers, click on the resource link above. Page 15
Available Study Resources on Quizplus for this Chatper
7 Verified Questions
7 Flashcards
Source URL: https://quizplus.com/quiz/69712
Sample Questions
Q1) Two methods of foreclosure include:
A) power-of-sale and statutory
B) power-of-sale and judiciary
C) judiciary and statutory
D) none of the above
Q2) Title insurance:
A) insures against losses on a property due to natural disasters
B) insures against losses due government restrictions on the use of the property
C) insures against losses due to changes in interest rates
D) none of the above
Q3) A deficiency judgment is:
A) a judgment that allows the mortgagor to redeem the property prior to foreclosure
B) a judgment against the borrower for the difference between the amount owed to a lender and the value of the property sold at a foreclosure sale
C) a judgment that allows the mortgage insurer to pursue the lender for losses in a foreclosure
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Value, Leverage, and Capital Structure
Available Study Resources on Quizplus for this Chatper
Source URL: https://quizplus.com/quiz/69711
Sample Questions
Q1) Depreciation is defined as a _______________ but not a cash outlay.
A) cash expense
B) tax deductible expense
C) production cost
D) part of your cash flow
E) none of the above
Q2) Investors purchase multiple properties to:
A) diversify a portfolio
B) maximize investment return
C) minimize risk
D) a and b
E) all of the above
Q3) A key non-real estate source of property cash flow is:
A) tax shelter
B) managerial talent
C) use of equity financing
D) debt financing
E) all the above
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: Federal Taxation and Real Estate Finance
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/69710
Sample Questions
Q1) Generally,the capital loss limitation rule allows taxpayers to offset capital losses against:
A) ordinary income
B) capital gains
C) passive gains
D) portfolio income
Q2) 16-11."Boot" refers to:
A) cash
B) non-like-kind property
C) relief of debt
D) all of the above
E) a and c
Q3) 16-12.Section 1031 limits the amount of personality included in an exchange to ______________________ of the aggregate value of the replacement property:
A) 15%
B) 18%
C) 20%
D) 25%
E) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Sources of Funds for Commercial Real Estate
Source URL: https://quizplus.com/quiz/69709
Sample Questions
Q1) The primary institutional investors in equity real estate are:
A) pension funds
B) federal credit agencies
C) unions
D) none of the above
Q2) Thrifts specialize in:
A) residential loans
B) multi-family properties
C) commercial properties
D) none of the above
Q3) Insurance companies invest primarily in:
A) CMOs
B) commercial mortgages
C) residential mortgages
D) none of the above
Q4) The largest supplier of commercial real estate debt is:
A) state and local retirement funds
B) commercial banks
C) thrifts
D) pension funds
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Acquisition, Development, and Construction Financing
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/69708
Sample Questions
Q1) 18-37.Raw land is acquired by two types of investors:
A) developer/warehouser
B) developer/speculator
C) speculator/warehouser
D) speculator/lender
Q2) A large proportion of the covenants and restrictions contained in loans to finance ADC of commercial properties are directed at the:
A) lender
B) seller
C) agency problems d developer
Q3) 18-19.If the developer fails to initiate construction,he will generally:
A) be subject to a fee
B) have the commitment fee returned
C) have no right to a return of the commitment fee
D) not be penalized
Q4) When a construction loan is made and the seller's note has been subordinated:
A) the construction lender will have a junior position in the case of default
B) the seller will have a junior position in the case of default
C) the construction lender will have a senior position in the case of default
D) both b and c
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Permanent Financing of Commercial Real
Estate Properties
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/69707
Sample Questions
Q1) A lease that is a substitute for debt financing is:
A) operating lease
B) capital lease
C) financing lease
D) sale-leaseback lease
Q2) 19-18.If an owner sells a property under a sale-leaseback agreement he or she may be required to continue to show the property on:
A) the balance sheet as a liability
B) the income statement as an expense
C) the balance sheet as an asset
D) the income statement as a revenue
Q3) An equity participating loan is when:
A) the lender has a claim to a portion of the income if it exceeds a residual amount
B) the lender shares in the income or cash flows from the property
C) a tradeoff between the owner/borrower and the lender occurs
D) all of the above
To view all questions and flashcards with answers, click on the resource link above.
21
Chapter 20: Ownership Structures for Financing and Holding Real Estate
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/69706
Sample Questions
Q1) 20-18.The individual who owns real estate in his or her name holds it as:
A) sole ownership
B) partnership in a community property state
C) corporation in New York
D) none of the above
Q2) 20-15.A REIT can NOT sell a property if:
A) it held the property for four or more years
B) it has sold less than five properties during the year
C) it acquired the property through a foreclosure
D) none of the above
Q3) 20-23.A partnership is terminated with:
A) the retirement of a partner
B) the death of a partner
C) the insanity of a partner
D) all of the above
Q4) 20-32.Under the Uniform Limited Partnership Act:
A) partnerships must have three or more partners
B) the affairs of a partnership must be administered by an unrelated party
C) there is no liability for any partner
D) there is liability for a general partner
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Real Estate in a Portfolio Context
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/69705
Sample Questions
Q1) 21-16.The major risks associated with investment in real estate include:
A) marketability risk
B) information risk
C) residual risk
D) none of the above
E) all of above
Q2) 21-17.The New Equilibrium Theory suggests that:
A) all assets in a portfolio have equal returns when diversified
B) the excess returns on real estate are a reward for the unique risk characteristics of real estate
C) the low returns on real estate are due to their inflation hedge characteristics
D) none of the above
Q3) The cost of obtaining all of the information sufficient to make an informed and rational investment in real estate is termed:
A) marketability risk
B) residual risk
C) formation risk
D) liquidity risk
To view all questions and flashcards with answers, click on the resource link above.
23
Chapter 22: Liability, Agency Problems, Fraud, and Ethics in Real Estate Finance
Available Study Resources on Quizplus for this Chatper
5 Verified Questions
5 Flashcards
Source URL: https://quizplus.com/quiz/69704
Sample Questions
Q1) The fiduciary relationship which results from the manifestation of consent by one person to another such that the other shall act on behalf and subject to his control,and consent by the other so to act,is referred to as:
A) statute of frauds
B) agency
C) lender control
D) parole evidence rule
Q2) One who intentionally causes injury to another is subject to liability to the other for that injury,if this conduct is generally culpable and not justifiable under the circumstances.This is referred to as:
A) prima facia tort
B) breach of contract
C) fraud
D) strict liability
Q3) Making of a promise with no intention of fulfilling it is referred to as:
A) nondisclosure fraud
B) promissory fraud
C) tort
D) fiduciary
To view all questions and flashcards with answers, click on the resource link above. Page 24