Urban Land Economics Final Exam
Course Introduction
Urban Land Economics explores the principles and dynamics underlying the use, development, and value of land in urban areas. The course examines how economic forces, policy decisions, and market mechanisms influence the allocation and pricing of land within cities, integrating topics such as land use planning, property markets, urban growth, housing, and the role of government regulation. Students will develop an understanding of how land economics impacts urban development, real estate investment, land use patterns, and sustainable urban growth, equipping them with analytical tools to address contemporary challenges in the management and development of urban land.
Recommended Textbook
Real Estate Finance Investments 16th Edition by William B Brueggeman
Available Study Resources on Quizplus
23 Chapters
827 Verified Questions
827 Flashcards
Source URL: https://quizplus.com/study-set/3426 Page 2
Chapter 1: Real Estate Investment: Basic Legal Concepts
Available Study Resources on Quizplus for this Chatper
26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/68060
Sample Questions
Q1) Real property refers to the ownership rights associated with real estate.
A)True
B)False
Answer: True
Q2) Which of the following is NOT a good method of title assurance?
A)Seller provides a warranty in the deed
B)An attorney searches recorded documents
C)Title insurance is purchased
D)Seller provides a quitclaim deed
Answer: D
Q3) A(n)________ estate represents the most complete form of ownership of real estate; the owner is free to divide it up into lesser estates and sell,lease,or borrow against them as he or she wishes.
A)Fee simple
B)Freehold
C)Leasehold
D)Life
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Real Estate Financing: Notes and Mortgages
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/68059
Sample Questions
Q1) A situation in which a borrower agrees to a court's jurisdiction and cooperates with the lender during litigation to resolve the situation:
A)Prepackaged bankruptcy
B)Judicial foreclosure
C)Friendly foreclosure
D)Voluntary conveyance
Answer: C
Q2) A non-recourse loan is one in which the borrower is personally liable for payment of all amounts due under the terms of the note.
A)True
B)False
Answer: False
Q3) It is a federal law that a mortgage must be recorded to be valid.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Mortgage Loan Foundations: The Time Value of Money
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/68058
Sample Questions
Q1) At the end of 8 years,your friend wants to have $50,000 saved for a down payment on a house.He expects to earn 8%-compounded monthly-on his investments over the next 8 years.How much would your friend have to put in his investment account each month to reach his goal?
A)$188
B)$374
C)$392
D)$521
Answer: B
Q2) An investment that costs $105,000 today is expected to produce the following cash inflows over each of the next five years: $20,000; $25,000; $23,000; $22,000; $21,000.What is the IRR (compounded annually)for this investment?
A)188.6%
B)18.9%
C)1.89%
D) 18.9%
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Fixed Interest Rate Mortgage Loans
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/68057
Sample Questions
Q1) Inflation makes very little difference to lenders of and investors needing money.
A)True
B)False
Q2) Which one of the following is TRUE about prepayment penalties?
A)They are never used with residential mortgages
B)They lower the effective cost if the loan is repaid before maturity
C)They are equivalent to charging additional points for the loan
D)They are not included in the APR calculation
Q3) Which of the following closing costs DO NOT increase the lender's effective loan yield?
A)Discount points
B)Prepayment penalties
C)Title insurance charges
D)Origination fees
Q4) The APR for a loan assumes it is prepaid after ten years.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Adjustable and Floating Rate Mortgage Loans
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/68056
Sample Questions
Q1) PLAMs have been very popular with lenders.
A)True
B)False
Q2) Given that every other factor is equal,which of the following ARMs will have the lowest expected cost?
A)An ARM with payment caps and negative amortization
B)An ARM with interest rate caps
C)An ARM with a longer adjustment interval
D)An ARM with no caps or limitations
Q3) If one of the terms of an ARM read,interest is capped at 2%/5%,what would that mean?
A)The borrower can choose the cap he wants by simply circling the appropriate choice
B)The interest rate has a 2% annual cap rate and a 5% lifetime cap rate
C)The interest rate has a 5% annual cap rate and a 2% lifetime cap rate
D)The interest rate has a 2% annual cap rate and a 5% floor cap rate
Q4) An ARM may also be referred to as a floating payment loan.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Mortgages: Additional Concepts, analysis, and Applications
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/68055
Sample Questions
Q1) When calculating the cash equivalent value of an assumable loan,you find the present value of the payments using the:
A)Contract interest rate
B)Incremental borrowing cost
C)Market interest rate
D)Discount rate
Q2) A house is for sale for $250,000.You have a choice of two 20-year mortgage loans with monthly payments: (1)if you make a down payment of $25,000,you can obtain a loan with a 6% rate of interest or (2)if you make a down payment of $50,000,you can obtain a loan with a 5% rate of interest.What is the effective annual rate of interest on the additional $25,000 borrowed on the first loan?
A)1.00%
B)6.00%
C)12.95%
D)18.67%
Q3) Homeowners should not borrow refinancing costs because the effective rate of refinancing will be higher.
A)True
B)False
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Single-Family Housing: Pricing, investment, and Tax Considerations
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/68054
Sample Questions
Q1) The influence on property values brought about by a net benefit related to the value of public goods less their cost is referred to as:
A)A capital gain
B)A capital loss
C)The capitalization effect
D)The depreciation effect
Q2) The appraisal function is purely objective; an appraiser's judgment is not part of the decision process.
A)True
B)False
Q3) A property is purchased for $200,000 with an 80 percent LTV.After five years,the owner's equity is $80,000.What would be the approximate annual expected appreciation rate on home equity (annual EAHE)?
A)13.9%
B)14.9%
C)20.0%
D)80.0%
E)100%
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Underwriting and Financing Residential Properties
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/68053
Sample Questions
Q1) General industry standards for a conventional loan specify a maximum LTV of 60 percent.
A)True
B)False
Q2) A borrower who was required to purchase private mortgage insurance as a condition of their mortgage should be able to eliminate that requirement if the loan-to-value ratio of a home is proven to have dropped to less than 85%.
A)True
B)False
Q3) RESPA requires a lender to disclose good faith estimates of closing costs within three days of loan application.
A)True
B)False
Q4) The FTL Act and RESPA essentially say the same things.
A)True
B)False
Q5) Title insurance protects the buyer from title claims against the property.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/68052
Sample Questions
Q1) A 1,500 square foot office space is leased at $12.00 square foot.The space is vacant one month out of the year.Office expenses are $6.50 per square foot and an expense stop is set at $6.00 per square foot.What is the annual net operating income?
A)$7,500
B)$6,750
C)$15,750
D)$8,250
Q2) Analysis of effective rents tends to be superior to analysis of total rents over the life of a lease.
A)True
B)False
Q3) Which of the following is FALSE regarding cap rates?
A)Excess supply tends to drive cap rates up
B)Rising interest rates generally tend to lower cap rates
C)Excess demand and falling interest rates result in lower cap rates
D)Excess demand leads to lower cap rates
Q4) A gross lease is riskier for the lessor than a net lease.
A)True
B)False
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Valuation of Income Properties: Appraisal and the Market for Capital
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/68051
Sample Questions
Q1) Which of the following statements regarding the sales comparison approach to appraisal is TRUE?
A)As a "rule of thumb" transactions involving foreclosures should be discounted by 10 percent
B)The comparable buildings' characteristics are more important than the comparable properties' location for performing the sales comparison
C)The comparable sales must involve transactions between unrelated individuals
D)The only factors important for comparable analysis are property size,building size,age of the building,and the condition of building
Q2) Which of the following choices represents the main categories of depreciation?
A)Physical,external,functional
B)Physical,economic,locational
C)External,structural,financial
D)Economic,physical,external
Q3) A property is purchased for $350,000.Based on an annual growth rate of 3%,the resale value at the end of year 10 would be $456,671.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investment Analysis and Taxation of Income Properties
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/68050
Sample Questions
Q1) The adjusted basis of a property is defined as:
A)Original cost + capital improvements accumulated depreciation
B)Sales price mortgage balance sales costs
C)Sales price accumulated depreciation
D)Original cost mortgage balance sales costs
Q2) An effective tax rate:
A)Takes into account the effects of depreciation and time value of money
B)Measures the actual difference between the BTIRR and the ATIRR
C)Can be less than the actual marginal tax rate
D)All of the above
Q3) In making an investment decision,IRR analysis will lead to a different "go/no-go" decision than NPV analysis.
A)True
B)False
Q4) Property held as a personal residence cannot be depreciated.
A)True
B)False
Q5) The debt coverage ratio is used by lenders to indicate the riskiness of a loan.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Financial Leverage and Financing Alternatives
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/68049
Sample Questions
Q1) Which of the following typically would NOT be used as a basis for a participation loan?
A)Increase in value over the holding period
B)NOI in excess of a base amount
C)Cash Flow after regular debt service
D)Potential gross income
Q2) The maximum interest rate that could be paid on a debt before the leverage becomes unfavorable is referred to as the:
A)Incremental cost of debt
B)Break-even interest rate
C)Favorable interest rate
D)Optimistic interest rate
Q3) A decrease in financial leverage would be expected to magnify the risk and the potential return of an income-producing property.
A)True
B)False
Q4) One benefit of leverage is that it reduces the variation in returns or losses.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Risk Analysis
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/68048
Sample Questions
Q1) Which of the following refers to the risk real estate investors face stemming from changes in general economic conditions?
A)Financial risk
B)Liquidity risk
C)Environmental risk
D)Business risk
Q2) Which of the following is NOT a component of lease rollover risk?
A)Commissions paid to a leasing agent to find a new tenant
B)Costs of tenant improvements demanded by new tenants
C)Liquidity risk
D)Reduced revenues from vacancy until a new tenant is found
Q3) The range of returns (highest to lowest)is the most common risk measure.
A)True
B)False
Q4) In general,investors are assumed to be risk seekers who must be compensated more for the higher risk of some investments.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Disposition and Renovation of Income Properties
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/68047
Sample Questions
Q1) Which of the following factors would NOT be considered when an investor is trying to decide whether to hold or sell a property at the end of year five?
A)After-tax operating income in year five
B)After-tax cash flow from the sale in year five
C)After-tax cash flow from the sale in the future
D)After-tax operating income after year five
Q2) Increasing rents tend to increase the marginal rate of return on a property.
A)True
B)False
Q3) A property could be sold today to provide an after-tax cash flow from sale of $800,000.The current after-tax cash flow from operations is $20,000,which is expected to grow by 4% per year.If sold next year,the property is expected to provide an after-tax cash flow of $824,000.What is the marginal rate of return for holding the property for an additional year?
A)5.6%
B)2.6%
C)3.1%
D)9.3%
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Financing Corporate Real Estate
Available Study Resources on Quizplus for this Chatper
32 Verified Questions
32 Flashcards
Source URL: https://quizplus.com/quiz/68046
Sample Questions
Q1) Non-recourse debt,such as a mortgage on a specific property,typically has a lower rate than the unsecured debt of companies with high credit ratings.
A)True
B)False
Q2) The cash flows considered in a lease versus own analysis are:
A)Purchase price,difference in cash flow from operations over the holding period,and cash flow from sale
B)Purchase price,lease payments,and cash flow from future sale
C)Cash flow from sale,differences in future operating expenses,and cash flow from future sale
D)Cash flow from sale,future lease payments,and differences in future operating expenses
Q3) If a company decides to lease a piece of real estate it will typically arrange for off-balance-sheet financing for the payments since they will be tracked on the income statement and not on the balance sheet.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Financing Project Development
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/68045
Sample Questions
Q1) A standby commitment differs from a permanent take-out commitment in that neither party really expects the standby commitment to be used by the developer.
A)True
B)False
Q2) Which of the following is the usual progression for a real estate development project?
A)Land acquisition,completion,management,sale,construction
B)Land acquisition,construction,completion,management,sale
C)Land acquisition,construction,completion,sale,management
D)Land acquisition,management,construction,completion,sale
Q3) In determining whether a project is commercially viable given the prevailing market rents,land prices,and construction and financing costs,a developer would be likely to conduct a(an):
A)Feasibility analysis
B)Submarket analysis
C)Economic analysis
D)Multivariate analysis
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Financing Land Development Projects
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/68044
Sample Questions
Q1) The amount to be paid to the lender from each lot sale is included in the:
A)Release schedule
B)Development agreement
C)Cost breakdowns
D)Subcontracts
Q2) A futures instrument,such as a T-bill,can be used to hedge a cash or a spot instrument such as the prime rate,where the two instruments are not perfectly correlated.What type of hedge is this referred to as?
A)A perfect hedge
B)A straight hedge
C)A cross hedge
D)None of the above
Q3) By using an option contract,a developer may profit from an appreciation in the property's value over the option period.
A)True
B)False
Q4) It is illegal for the lender to hold back funds from the developer.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Structuring Real Estate Investments:
Organizational Forms and Joint Ventures
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/68043
Sample Questions
Q1) Which form of ownership may be viewed unfavorably for use in real estate investment due to the personal liability associated with this approach?
A)General partnership
B)Limited partnership
C)Sole proprietorship
D)C Corp
Q2) Interest and real estate tax incurred during construction of real property improvements must be:
A)Deducted from the resale price of the property
B)Included in the depreciable basis of the property
C)Expensed over the construction period
D)Not be included as value of improvements
Q3) When a syndication is offered as a "blind pool" offering,the properties to be purchased are not identified before funds are raised.
A)True
B)False
Q4) Tax losses cannot be allocated to partners in a syndication.
A)True
B)False
20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: The Secondary Mortgage Market: Pass-Through Securities
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/68042
Sample Questions
Q1) A 25-year maturity mortgage-backed bond is issued.The bond has a par value of $10,000 and promises to pay an 8 percent annual coupon.At issue,bond market investors require a 12 percent interest rate on the bond.Assume that 20 years after the bond is issued,bond market investors require a 15 percent interest rate on the bond.What is the market price of the bond?
A)$5,686
B)$6,863
C)$7,653
D)$14,270
Q2) The primary purpose of Freddie Mac (FHLMC)is to:
A)Provide a secondary market for mortgage originators
B)Provide investors with a guaranteed rate of return
C)Create competition for Fannie Mae and Ginnie Mae
D)Provide consumers with more options when deciding on a mortgage loan
Q3) Issuers typically pledge 105 percent to 120 percent in mortgage collateral in excess of par value of the securities issued,in order to overcollateralized MBBs.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: The Secondary Mortgage Market: Cmos and
Derivative Securities
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/68041
Sample Questions
Q1) In CDOs both equity and debt holders prefer riskier,higher-yielding collateral to collect excess spreads.
A)True
B)False
Q2) Which of the following is NOT characteristic of commercial-backed mortgage securities?
A)The underlying mortgage pool represents a variety of different property types (retail,multifamily,etc.)and a specific geographical area
B)The underlying mortgages have usually been outstanding for several years
C)One of the primary issuers of such securities are insurance companies
D)In general,the underlying mortgage pool for such securities contain fewer mortgages than are included in residential-backed mortgage pools
Q3) Class A investors are sometimes repaid with an accelerated pattern of cash flows and are sometimes referred to as:
A)Accelerated tranches
B)Quick pay tranches
C)Tranche residuals
D)Fast pay tranches
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Real Estate Investment Trusts Reits
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/68040
Sample Questions
Q1) An investor pays $63.00 per share for stock in a given REIT.The REIT declares a dividend of $4.00 per share and has an EPS of $2.37.Considering the recovery of capital (ROC),what is the new cost basis of the stock acquired by the investor?
A)$60.63
B)$61.37
C)$63.00
D)$64.63
Q2) Which of the following is NOT a current type of REIT?
A)Mortgage trust
B)Equity trust
C)Hybrid trust
D)Neither Mortgage trust nor Hybrid trust
Q3) The funds from operations (FFO)for a REIT is roughly equal to:
A)NOI less interest deductions
B)Earnings before tax plus noncash expenses
C)NOI plus interest deductions
D)Earnings per share plus capital gains
Q4) The U.S.is the only country that allows REITs (or similar investments).
A)True
B)False
Page 23
To view all questions and flashcards with answers, click on the resource link above.
Chapter 22: Real Estate Investment Performance and Portfolio Considerations
Available Study Resources on Quizplus for this Chatper
33 Verified Questions
33 Flashcards
Source URL: https://quizplus.com/quiz/68039
Sample Questions
Q1) The NCREIF index measures the investment performance of real estate by using actual sale prices.
A)True
B)False
Q2) Both levered and unlevered properties are included in the NCREIF Property Index.
A)True
B)False
Q3) When comparing investment alternatives,the standard deviation is deemed to be a measure of risk.
A)True
B)False
Q4) Regarding real estate investments,risk that is associated with the type of property and its location,design,lease structure,and so on can be thought of as:
A)Marketability risk
B)Liquidity risk
C)Business risk
D)Interest rate risk
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Real Estate Investment Funds: Structure,
performance, benchmarking, and Attribution Analysis
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/68038
Sample Questions
Q1) Which of the following documents is used to inform real estate fund investors of the discretion that managers may exercise related to the acquisition,management,and sale of properties in the fund?
A)fund agreement
B)prospectus
C)due diligence record
D)deed of trust
Q2) During the period before a fund manager begins to physically purchase properties,investors are typically asked to make capital ________.
A)calls
B)commitments
C)contributions
D)assurances
Q3) A new real estate investment fund might feature a "lock-up period" that would prohibit investors from exiting the fund during the fund's first year or two in operation.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 25