REE 4204 Sirmans EXAM PREP ALREADY
PASSED
Finance - =-study of the process, institutions,markets and instruments used to transfer money and
credit between individuals, business, and gov
applied economics - =-study of the allocation of resources for the purpose of producing goods
and services for various members of society
-considers time value of money and implications of the interest rates
-focused on cash flows not profts
-makes extensive use of the concept of risk
Real estate finance - =-study of institutions, markets, and instruments used to transfer money and
credit for the purpose of developing or acquiring real property
real property - =-rights,powers, and privileges associated with the use of real estate
real estate - =land and all the fixed immovable improvements on it
Environment of real estate - =the institutions that create and purchase real property and the
markets within which they are transferred
financial intermediaries - =-the financial institutions that channel funds from the surplus income
units to the deficit income units
-commercial banks
-thrift instituions- S&L associations and mutual savings banks
-investment companies-pool the funds of savers and invest the funds in a portfolio of assets
- insurance companies- receive periodic or lump sum payments from individiudals or
organizations in return for a promise to make future payments if certain events occur
-pension funds
, Direct financing - =- when the flow of funds takes the place without the use of intermediaries
primary mortgage market - =-market where mortgages are originated
secondary mortgage market - =-fannie Mae, freddie Mac, ginnie mae
-agencies and firms that purchase mortgages form other intermediaries or brokers that deal with
surplus income units, using funds raised through the sales of securities they create
-issue mortgages using mortgage pool s at collateral
-a large and active secondary market makes assets more liqid
Financial markets are divided into two categories - =1. money markets- short-term securities of 1
yr to less
2. capital markets-long term securities more than 1 yr to maturity (real estate financing takes
place here)
General lèvel of real estates with bonds - =-no risk in bonds
-the price of a bond is inversely related to and determined by the market required yield
monetary theory of inflation - =-the greater the rate of growth in money the greater the rate of
inflation
fisher equation - =-inflation rate plays an important role in the market rate
-I(nominal rate observed in the market)=r(real rate lender wants to receive)+p(expected inflation
over the maturity)
Risks in Real Estate - =-default risk-risk that borrower will not repay the mortgage per the
contract
-callability risk-borrower might pay before maturity
-maturity risk-the longer the maturity of an asset the greater the given change in interest rates
PASSED
Finance - =-study of the process, institutions,markets and instruments used to transfer money and
credit between individuals, business, and gov
applied economics - =-study of the allocation of resources for the purpose of producing goods
and services for various members of society
-considers time value of money and implications of the interest rates
-focused on cash flows not profts
-makes extensive use of the concept of risk
Real estate finance - =-study of institutions, markets, and instruments used to transfer money and
credit for the purpose of developing or acquiring real property
real property - =-rights,powers, and privileges associated with the use of real estate
real estate - =land and all the fixed immovable improvements on it
Environment of real estate - =the institutions that create and purchase real property and the
markets within which they are transferred
financial intermediaries - =-the financial institutions that channel funds from the surplus income
units to the deficit income units
-commercial banks
-thrift instituions- S&L associations and mutual savings banks
-investment companies-pool the funds of savers and invest the funds in a portfolio of assets
- insurance companies- receive periodic or lump sum payments from individiudals or
organizations in return for a promise to make future payments if certain events occur
-pension funds
, Direct financing - =- when the flow of funds takes the place without the use of intermediaries
primary mortgage market - =-market where mortgages are originated
secondary mortgage market - =-fannie Mae, freddie Mac, ginnie mae
-agencies and firms that purchase mortgages form other intermediaries or brokers that deal with
surplus income units, using funds raised through the sales of securities they create
-issue mortgages using mortgage pool s at collateral
-a large and active secondary market makes assets more liqid
Financial markets are divided into two categories - =1. money markets- short-term securities of 1
yr to less
2. capital markets-long term securities more than 1 yr to maturity (real estate financing takes
place here)
General lèvel of real estates with bonds - =-no risk in bonds
-the price of a bond is inversely related to and determined by the market required yield
monetary theory of inflation - =-the greater the rate of growth in money the greater the rate of
inflation
fisher equation - =-inflation rate plays an important role in the market rate
-I(nominal rate observed in the market)=r(real rate lender wants to receive)+p(expected inflation
over the maturity)
Risks in Real Estate - =-default risk-risk that borrower will not repay the mortgage per the
contract
-callability risk-borrower might pay before maturity
-maturity risk-the longer the maturity of an asset the greater the given change in interest rates
