IAAO 102 Exam 1 Questions with Correct
Answers
Value is created by the expectation of benefits to be derived in the future.
Anticipation
The prices, rents, and rates of return of property tend to be set by the current prices,
rents, and rates of return for equally desirable substitute properties.
Substitution
The most profitable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue
stimulus.
Market Value
The worth of an investment property to a particular investor. Investment value may or
may not coincide with market value depending on the requirements of the specific
investor.
Investment value
1. All investors want a return ON their investment
Overall yield or Discount rate
All investors want a return OF their investment.
Recapture rate
Can be positive, negative or neutral.
,Leverage
Mortgage only on personal property.
Chattel
What is also known as the discount rate, reflects the return on investment?
Overall yield rate (Yo)
IRV
Income NOI (net operating income)
Rate
Value
I = RxV
R= I \ V
V=I\R
VIF
Value = Income x Factor
Income = Value \ Factor
Factor = Value \ Income
One of the three approaches to value in which the appraiser derives a value indication
by converting anticipated benefits through ownership of income-producing property is
the what approach?
Income
, The economic principle of ______________
states that value is created by the expectation of benefits to be derived in the future.
Anticipation
The economic principle of ______________
states that a property's maximum value tends to be set by the lowest cost or price at
which another property of equivalent utility can be acquired.
Substitution
The ________ rate reflects the return of the investment in the wasting asset.
Recapture
Competition is created by the potential for profits. However, competition among sellers
may lead to an ______________, which reduces prices and profits. Competition among
buyers may lead to ______________, which increases prices and profits to sellers.
over supply
shortage
A mortgage on personal property is termed a ___________ mortgage.
Chattel
A ____________ is called a second mortgage.
Junior
Four (five) types of mortgages according to the repayment provisions.
1. Amortized
2. Variable
3. Straight
Answers
Value is created by the expectation of benefits to be derived in the future.
Anticipation
The prices, rents, and rates of return of property tend to be set by the current prices,
rents, and rates of return for equally desirable substitute properties.
Substitution
The most profitable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue
stimulus.
Market Value
The worth of an investment property to a particular investor. Investment value may or
may not coincide with market value depending on the requirements of the specific
investor.
Investment value
1. All investors want a return ON their investment
Overall yield or Discount rate
All investors want a return OF their investment.
Recapture rate
Can be positive, negative or neutral.
,Leverage
Mortgage only on personal property.
Chattel
What is also known as the discount rate, reflects the return on investment?
Overall yield rate (Yo)
IRV
Income NOI (net operating income)
Rate
Value
I = RxV
R= I \ V
V=I\R
VIF
Value = Income x Factor
Income = Value \ Factor
Factor = Value \ Income
One of the three approaches to value in which the appraiser derives a value indication
by converting anticipated benefits through ownership of income-producing property is
the what approach?
Income
, The economic principle of ______________
states that value is created by the expectation of benefits to be derived in the future.
Anticipation
The economic principle of ______________
states that a property's maximum value tends to be set by the lowest cost or price at
which another property of equivalent utility can be acquired.
Substitution
The ________ rate reflects the return of the investment in the wasting asset.
Recapture
Competition is created by the potential for profits. However, competition among sellers
may lead to an ______________, which reduces prices and profits. Competition among
buyers may lead to ______________, which increases prices and profits to sellers.
over supply
shortage
A mortgage on personal property is termed a ___________ mortgage.
Chattel
A ____________ is called a second mortgage.
Junior
Four (five) types of mortgages according to the repayment provisions.
1. Amortized
2. Variable
3. Straight
