IAAO 102 EXAM Question and Answer
(2026/2027) | Complete Revision Guide |
A+ Verified
• Anticipation . CORRECT ANSWER: the underlying principle which provides the basis
of the income capitalization approach
• income divided by rate equals value . CORRECT ANSWER: the basic equation used
in the income approach to value
• NOT a typical unit of comparison in the valuation of an apartment building .
CORRECT ANSWER: price per acre
• Income approach to value . CORRECT ANSWER: -based on the principle of
anticipation
-translates the ability of property to generate income into an indication of value
-requires an estimate of net operating income of property
• Value is created by the anticipation of . CORRECT ANSWER: future benefits
• capitalization is the process used to . CORRECT ANSWER: convert income into and
estimate of value
• a loan secured by real property featuring an interest rate that is constant for the term
of the loan is referred to as a . CORRECT ANSWER: fixed-rate mortgage
• A loan is made in which an existing loan is retained and an additional loan, larger than
the existing loan, is made. The new lender accepts the obligation to make payments on
the old loan. This is an example of what kind of mortgage? . CORRECT ANSWER:
Wraparound mortgage
• From the tenant's standpoint, when economic rent exceeds contract rent the difference
is know as: . CORRECT ANSWER: leasehold income
• The rental income that a property would most probably command in the open market
is called: . CORRECT ANSWER: Market rent
• NOT an allowable expense from the appraiser's point of view: . CORRECT ANSWER:
depreciation
• Why does an appraiser prepare a reconstructed operating statement when using the
income approach? . CORRECT ANSWER: to develop an estimated projection of
expected income and expense that will reflect the earning capacity of the property
(2026/2027) | Complete Revision Guide |
A+ Verified
• Anticipation . CORRECT ANSWER: the underlying principle which provides the basis
of the income capitalization approach
• income divided by rate equals value . CORRECT ANSWER: the basic equation used
in the income approach to value
• NOT a typical unit of comparison in the valuation of an apartment building .
CORRECT ANSWER: price per acre
• Income approach to value . CORRECT ANSWER: -based on the principle of
anticipation
-translates the ability of property to generate income into an indication of value
-requires an estimate of net operating income of property
• Value is created by the anticipation of . CORRECT ANSWER: future benefits
• capitalization is the process used to . CORRECT ANSWER: convert income into and
estimate of value
• a loan secured by real property featuring an interest rate that is constant for the term
of the loan is referred to as a . CORRECT ANSWER: fixed-rate mortgage
• A loan is made in which an existing loan is retained and an additional loan, larger than
the existing loan, is made. The new lender accepts the obligation to make payments on
the old loan. This is an example of what kind of mortgage? . CORRECT ANSWER:
Wraparound mortgage
• From the tenant's standpoint, when economic rent exceeds contract rent the difference
is know as: . CORRECT ANSWER: leasehold income
• The rental income that a property would most probably command in the open market
is called: . CORRECT ANSWER: Market rent
• NOT an allowable expense from the appraiser's point of view: . CORRECT ANSWER:
depreciation
• Why does an appraiser prepare a reconstructed operating statement when using the
income approach? . CORRECT ANSWER: to develop an estimated projection of
expected income and expense that will reflect the earning capacity of the property
