NYC CITY ASSESSOR (PROMOTION) EXAM STUDY GUIDE:
200 EXAM QUESTIONS WITH DETAILED ANSWERS &
RATIONALES
1. An assessor is reviewing a sale where the buyer paid cash, but the
comparable sale was financed with a below-market interest rate loan.
Which element of comparison requires adjustment?
A. Market conditions
B. Financing terms
C. Conditions of sale
D. Location
Answer: B. Financing terms require adjustment because favorable
financing can inflate the sale price above market value.
2. A property's value is negatively impacted because it is the largest
and most expensive home in a neighborhood of modest houses.
Which principle best explains this?
A. Progression
B. Conformity
C. Regression
D. Contribution
Answer: C. Regression states that a higher-valued property suffers
when surrounded by lower-valued properties.
3. An assessor determines that a property's highest and best use must
be legally permissible, physically possible, financially feasible, and
maximally productive. Which concept is being applied?
,A. Highest and best use
B. Equalization
C. Replacement cost
D. Depreciated utility
Answer: A. Highest and best use identifies the reasonably probable
use that satisfies all four criteria and produces the greatest value.
4. A property has a net operating income of $80,000 and an overall
capitalization rate of 8%. What is the indicated value?**
A. $640,000
B. $1,000,000
C. $800,000
D. $1,200,000
**Answer: B. Value = NOI ÷ Cap Rate. $80,000 ÷ 0.08 = $1,000,000.
5. Which valuation approach converts anticipated property income
into an indication of value?
A. Cost approach
B. Sales comparison approach
C. Income approach
D. Replacement reserve approach
Answer: C. The income approach is based on the principle that value is
created by the expectation of future benefits (income).
6. A property has effective gross income of $150,000 and operating
expenses of $60,000. What is its net operating income?
A. $90,000
B. $210,000
C. $150,000
D. $60,000
,Answer: A. NOI = Effective Gross Income - Operating Expenses.
$150,000 - $60,000 = $90,000.
7. An assessor is comparing a recently sold property with a subject
property that has similar location, size, age, and physical
characteristics. Which valuation principle is being applied most
directly?
A. Principle of anticipation
B. Principle of substitution
C. Principle of contribution
D. Principle of increasing returns
Answer: B. The principle of substitution recognizes that a rational
buyer will not pay more for a property than the cost of acquiring an
equally desirable substitute.
8. A property's value increases because nearby infrastructure
improvements make the surrounding neighborhood substantially
more desirable to prospective buyers. Which principle best explains
this effect?
A. Regression
B. Conformity
C. Progression
D. Competition
Answer: C. Progression describes the tendency of a lower-valued
property to gain value when located among higher-valued properties
or within an improving neighborhood.
9. A property contains a large older structure, but zoning permits
redevelopment into a significantly more valuable use. What should an
assessor investigate first?
, A. The owner's purchase price
B. The property's highest and best use
C. The property's insurance premium
D. The owner's mortgage balance
Answer: B. When redevelopment potential exists, the assessor should
determine whether the legally permissible and financially feasible
alternative use produces greater value.
10. An assessor calculates net operating income and divides it by an
appropriate capitalization rate to estimate property value. Which
formula is being applied?
A. Value = Cost × Depreciation
B. Value = NOI ÷ Capitalization Rate
C. Value = Rent × Vacancy Rate
D. Value = Expense ÷ NOI
Answer: B. Direct capitalization converts a property's stabilized net
operating income into an estimated value by dividing income by the
capitalization rate.
11. A property's stabilized net operating income is $120,000 and the
capitalization rate is 6%. What indicated value results?**
A. $720,000
B. $1,200,000
C. $2,000,000
D. $2,400,000
**Answer: C. Applying the income capitalization formula, $120,000
divided by 0.06 produces an indicated value of $2,000,000.
12. A property has effective gross income of $250,000 and operating
expenses of $100,000. What is its net operating income before debt
200 EXAM QUESTIONS WITH DETAILED ANSWERS &
RATIONALES
1. An assessor is reviewing a sale where the buyer paid cash, but the
comparable sale was financed with a below-market interest rate loan.
Which element of comparison requires adjustment?
A. Market conditions
B. Financing terms
C. Conditions of sale
D. Location
Answer: B. Financing terms require adjustment because favorable
financing can inflate the sale price above market value.
2. A property's value is negatively impacted because it is the largest
and most expensive home in a neighborhood of modest houses.
Which principle best explains this?
A. Progression
B. Conformity
C. Regression
D. Contribution
Answer: C. Regression states that a higher-valued property suffers
when surrounded by lower-valued properties.
3. An assessor determines that a property's highest and best use must
be legally permissible, physically possible, financially feasible, and
maximally productive. Which concept is being applied?
,A. Highest and best use
B. Equalization
C. Replacement cost
D. Depreciated utility
Answer: A. Highest and best use identifies the reasonably probable
use that satisfies all four criteria and produces the greatest value.
4. A property has a net operating income of $80,000 and an overall
capitalization rate of 8%. What is the indicated value?**
A. $640,000
B. $1,000,000
C. $800,000
D. $1,200,000
**Answer: B. Value = NOI ÷ Cap Rate. $80,000 ÷ 0.08 = $1,000,000.
5. Which valuation approach converts anticipated property income
into an indication of value?
A. Cost approach
B. Sales comparison approach
C. Income approach
D. Replacement reserve approach
Answer: C. The income approach is based on the principle that value is
created by the expectation of future benefits (income).
6. A property has effective gross income of $150,000 and operating
expenses of $60,000. What is its net operating income?
A. $90,000
B. $210,000
C. $150,000
D. $60,000
,Answer: A. NOI = Effective Gross Income - Operating Expenses.
$150,000 - $60,000 = $90,000.
7. An assessor is comparing a recently sold property with a subject
property that has similar location, size, age, and physical
characteristics. Which valuation principle is being applied most
directly?
A. Principle of anticipation
B. Principle of substitution
C. Principle of contribution
D. Principle of increasing returns
Answer: B. The principle of substitution recognizes that a rational
buyer will not pay more for a property than the cost of acquiring an
equally desirable substitute.
8. A property's value increases because nearby infrastructure
improvements make the surrounding neighborhood substantially
more desirable to prospective buyers. Which principle best explains
this effect?
A. Regression
B. Conformity
C. Progression
D. Competition
Answer: C. Progression describes the tendency of a lower-valued
property to gain value when located among higher-valued properties
or within an improving neighborhood.
9. A property contains a large older structure, but zoning permits
redevelopment into a significantly more valuable use. What should an
assessor investigate first?
, A. The owner's purchase price
B. The property's highest and best use
C. The property's insurance premium
D. The owner's mortgage balance
Answer: B. When redevelopment potential exists, the assessor should
determine whether the legally permissible and financially feasible
alternative use produces greater value.
10. An assessor calculates net operating income and divides it by an
appropriate capitalization rate to estimate property value. Which
formula is being applied?
A. Value = Cost × Depreciation
B. Value = NOI ÷ Capitalization Rate
C. Value = Rent × Vacancy Rate
D. Value = Expense ÷ NOI
Answer: B. Direct capitalization converts a property's stabilized net
operating income into an estimated value by dividing income by the
capitalization rate.
11. A property's stabilized net operating income is $120,000 and the
capitalization rate is 6%. What indicated value results?**
A. $720,000
B. $1,200,000
C. $2,000,000
D. $2,400,000
**Answer: C. Applying the income capitalization formula, $120,000
divided by 0.06 produces an indicated value of $2,000,000.
12. A property has effective gross income of $250,000 and operating
expenses of $100,000. What is its net operating income before debt
