Real Estate Principles: A Value Approach, 5e (Ling)
Chapter 1 The Nature of Real Estate and Real Estate Markets
1) When viewed as a tangible asset, real estate can be defined as the land and its
permanent improvements. Improvements on the land include
A) fences.
B) walkways.
C) sewer systems.
D) streets.
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
2) All of the following are examples of an improvement on the land except
A) fences.
B) building.
C) walls.
D) streets.
Answer: D
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
3) Real estate is defined as land and its permanent improvements. Which of the following
is an example of an improvement to the land?
A) fence
B) building
C) sewer system
D) personal property
Answer: C
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
,4) Real estate consists of the physical structures and infrastructure that accompany the
land. All of the following are examples of an improvement to the land except
A) walkways.
B) building.
C) sewer system.
D) streets.
Answer: B
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
5) Real estate is property, which can be either a tangible or an intangible asset. Which of
the following would be considered an intangible asset?
A) land
B) building
C) mortgage
D) fence
Answer: C
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
6) Which of the following would be considered a tangible asset?
A) land
B) lease agreement
C) mortgage
D) listed REIT
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
7) If we desire to classify land by its use, land that does not include any improvements to
the land would be categorized as
A) "raw" or undeveloped land.
B) building site.
C) developed land.
D) property infrastructure.
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-02 Discuss the distribution of U.S. land among the various uses
to which it is put (e.g. developed land, federal land, forest land).
,Accessibility: Keyboard Navigation
8) The size of a single-family residential lot is typically
A) less than one acre.
B) between one and two acres.
C) between two and three acres.
D) greater than three acres.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-02 Discuss the distribution of U.S. land among the various uses
to which it is put (e.g. developed land, federal land, forest land).
Accessibility: Keyboard Navigation
9) As of 2015, the single largest asset category in the net worth portfolios of households
is
A) government and corporate bonds.
B) stocks and mutual fund shares.
C) consumer durable goods.
D) housing.
Answer: D
Difficulty: 2 Medium
Learning Objective: 01-04 Describe the role real estate plays in the portfolios of U.S.
households.
Accessibility: Keyboard Navigation
10) Real estate values derive from the interaction of three different sectors in the
economy. Which of the following sectors serves to allocate financial resources among
households and firms requiring funds?
A) user market
B) capital market
C) government
D) property market
Answer: B
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
, 11) The demand for real estate derives from the need that market participants (e.g., owner
occupants, tenants, renters) have for shelter and convenient access to other locations. This
competition for physical location and space occurs in the
A) user market.
B) capital market.
C) government sector.
D) property market.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
12) The expected stream of rental income is capitalized into value by converting expected
future cash flows into present value through a process called
A) amortization.
B) discounting.
C) compounding.
D) accounting.
Answer: B
Difficulty: 1 Easy
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
13) Capital markets can be divided into four main categories: private equity, public
equity, private debt, and public debt. An example of a real estate asset that trades in the
private equity market is
A) real property.
B) home mortgages.
C) equity REITs.
D) mortgage backed securities.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
Chapter 1 The Nature of Real Estate and Real Estate Markets
1) When viewed as a tangible asset, real estate can be defined as the land and its
permanent improvements. Improvements on the land include
A) fences.
B) walkways.
C) sewer systems.
D) streets.
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
2) All of the following are examples of an improvement on the land except
A) fences.
B) building.
C) walls.
D) streets.
Answer: D
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
3) Real estate is defined as land and its permanent improvements. Which of the following
is an example of an improvement to the land?
A) fence
B) building
C) sewer system
D) personal property
Answer: C
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
,4) Real estate consists of the physical structures and infrastructure that accompany the
land. All of the following are examples of an improvement to the land except
A) walkways.
B) building.
C) sewer system.
D) streets.
Answer: B
Difficulty: 2 Medium
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
5) Real estate is property, which can be either a tangible or an intangible asset. Which of
the following would be considered an intangible asset?
A) land
B) building
C) mortgage
D) fence
Answer: C
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
6) Which of the following would be considered a tangible asset?
A) land
B) lease agreement
C) mortgage
D) listed REIT
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-01 Provide three alternative definitions for the term real estate.
Accessibility: Keyboard Navigation
7) If we desire to classify land by its use, land that does not include any improvements to
the land would be categorized as
A) "raw" or undeveloped land.
B) building site.
C) developed land.
D) property infrastructure.
Answer: A
Difficulty: 1 Easy
Learning Objective: 01-02 Discuss the distribution of U.S. land among the various uses
to which it is put (e.g. developed land, federal land, forest land).
,Accessibility: Keyboard Navigation
8) The size of a single-family residential lot is typically
A) less than one acre.
B) between one and two acres.
C) between two and three acres.
D) greater than three acres.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-02 Discuss the distribution of U.S. land among the various uses
to which it is put (e.g. developed land, federal land, forest land).
Accessibility: Keyboard Navigation
9) As of 2015, the single largest asset category in the net worth portfolios of households
is
A) government and corporate bonds.
B) stocks and mutual fund shares.
C) consumer durable goods.
D) housing.
Answer: D
Difficulty: 2 Medium
Learning Objective: 01-04 Describe the role real estate plays in the portfolios of U.S.
households.
Accessibility: Keyboard Navigation
10) Real estate values derive from the interaction of three different sectors in the
economy. Which of the following sectors serves to allocate financial resources among
households and firms requiring funds?
A) user market
B) capital market
C) government
D) property market
Answer: B
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
, 11) The demand for real estate derives from the need that market participants (e.g., owner
occupants, tenants, renters) have for shelter and convenient access to other locations. This
competition for physical location and space occurs in the
A) user market.
B) capital market.
C) government sector.
D) property market.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
12) The expected stream of rental income is capitalized into value by converting expected
future cash flows into present value through a process called
A) amortization.
B) discounting.
C) compounding.
D) accounting.
Answer: B
Difficulty: 1 Easy
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
13) Capital markets can be divided into four main categories: private equity, public
equity, private debt, and public debt. An example of a real estate asset that trades in the
private equity market is
A) real property.
B) home mortgages.
C) equity REITs.
D) mortgage backed securities.
Answer: A
Difficulty: 2 Medium
Learning Objective: 01-03 Discuss the value and importance of U.S. real estate
compared with the values of other asset classes such as stocks and bonds.
Accessibility: Keyboard Navigation
