CERTIFIED GENERAL APPRAISER EXAM
PRACTICE QUESTIONS AND CORRECT
ANSWERS
Question 1
WHICH OF THE FOLLOWING IS THE PREFERRED METHOD OF DERIVING A
CAPITALIZATION RATE?
A. SUMMATION
B. BAND OF INVESTMENT
C. DIRECT COMPARISON
D. BANK OF INVESTMENT
E. MONETARY POLICY
Correct Answer
C
Question 2
THE OPERATING EXPENSE RATIO FOR INCOME PROPERTY IS TYPICALLY
A. BETWEEN 4 AND 10
B. UNDER 100%
C. UNDER 10%
D. UNDER 2%
E. MORE THAN 10
Correct Answer
B
Page 1 of 32
,Question 3
WHAT IS THE COST OF INSTALLING STREETS AND WATER AND SEWER LINES?
A. $16,000
B. $32,000
C. $64,000
D. $160,000
E. NONE OF THE ABOVED
Correct Answer
D
Question 4
GENERALLY, THE LEAST RELIABLE SOURCES OF SALES DATA ARE
A. BANKERS
B. APPRAISERS
C. NEWSPAPER ARTICLES
D. BROKERS
E. SELLERS
Correct Answer
C
Question 5
HOW MANY LOTS CAN BE DEVELOPED?
A. 20
B. 64
C. 80
D. 88
E. 16
Correct Answer
B
Page 2 of 32
,Question 6
WHAT IS THE GROSS SALES PRICE FROM THE SALE OF ALL LOTS?
A. $288,000
B. $360,000
C. $1,152,000
D. $1,440,000
E. $1,584,000
Correct Answer
C
Question 7
IN ARRIVING AT AN EFFECTIVE GROSS INCOME FIGURE, AN APPRAISER OF RENTAL
PROPERTY MAKES A DEDUCTION FOR
A. REAL PROPERTY TAXES
B. REPAIRS
C. VACANCY
D. DEPRECIATION
E. REPLACEMENT RESERVES
Correct Answer
C
Question 8
THE APPROPRIATE TIME ADJUSTMENT FOR A PROPERTY IS CONCLUDED TO BE AN
INCREASE OF 7% PER YEAR COMPOUNDED. THE TIME ADJUSTMENT FOR A
COMPARABLE SALES PROPERTY THAT SOLD FOR $40,000 TWO YEARS AGO IS
A. -$5,796
B. -$5,600
C. -$2,800
D. -$5,600
E. -$5,796
Correct Answer
E
Page 3 of 32
, Question 9
THE MEDIAN MONTHLY RENTAL IS
A. $1,350
B. $1,400
C. $1,470
D. $1,480
E. NONE OF THE ABOVE
Correct Answer
C
Question 10
THE PROCEDURE USED TO CONVERT EXPECTED FUTURE BENEFITS INTO PRESENT
VALUE IS
A. REDISUAL ANALYSIS
B. CAPITALIZATION
C. MARKET CAPITALIZATION
D. EQUITY CAPITALIZATION
E. COMPOUNDING
Correct Answer
B
Question 11
OPERATING INCOME DATA DO NOT INCLUDE
A. VACANCY RATE
B. REPRODUCTION COST
C. OPERATING EXPENSES
D. UTILITIES PROVIDED BY THE OWNER
E. LEASE TERMS
Correct Answer
B
Page 4 of 32
PRACTICE QUESTIONS AND CORRECT
ANSWERS
Question 1
WHICH OF THE FOLLOWING IS THE PREFERRED METHOD OF DERIVING A
CAPITALIZATION RATE?
A. SUMMATION
B. BAND OF INVESTMENT
C. DIRECT COMPARISON
D. BANK OF INVESTMENT
E. MONETARY POLICY
Correct Answer
C
Question 2
THE OPERATING EXPENSE RATIO FOR INCOME PROPERTY IS TYPICALLY
A. BETWEEN 4 AND 10
B. UNDER 100%
C. UNDER 10%
D. UNDER 2%
E. MORE THAN 10
Correct Answer
B
Page 1 of 32
,Question 3
WHAT IS THE COST OF INSTALLING STREETS AND WATER AND SEWER LINES?
A. $16,000
B. $32,000
C. $64,000
D. $160,000
E. NONE OF THE ABOVED
Correct Answer
D
Question 4
GENERALLY, THE LEAST RELIABLE SOURCES OF SALES DATA ARE
A. BANKERS
B. APPRAISERS
C. NEWSPAPER ARTICLES
D. BROKERS
E. SELLERS
Correct Answer
C
Question 5
HOW MANY LOTS CAN BE DEVELOPED?
A. 20
B. 64
C. 80
D. 88
E. 16
Correct Answer
B
Page 2 of 32
,Question 6
WHAT IS THE GROSS SALES PRICE FROM THE SALE OF ALL LOTS?
A. $288,000
B. $360,000
C. $1,152,000
D. $1,440,000
E. $1,584,000
Correct Answer
C
Question 7
IN ARRIVING AT AN EFFECTIVE GROSS INCOME FIGURE, AN APPRAISER OF RENTAL
PROPERTY MAKES A DEDUCTION FOR
A. REAL PROPERTY TAXES
B. REPAIRS
C. VACANCY
D. DEPRECIATION
E. REPLACEMENT RESERVES
Correct Answer
C
Question 8
THE APPROPRIATE TIME ADJUSTMENT FOR A PROPERTY IS CONCLUDED TO BE AN
INCREASE OF 7% PER YEAR COMPOUNDED. THE TIME ADJUSTMENT FOR A
COMPARABLE SALES PROPERTY THAT SOLD FOR $40,000 TWO YEARS AGO IS
A. -$5,796
B. -$5,600
C. -$2,800
D. -$5,600
E. -$5,796
Correct Answer
E
Page 3 of 32
, Question 9
THE MEDIAN MONTHLY RENTAL IS
A. $1,350
B. $1,400
C. $1,470
D. $1,480
E. NONE OF THE ABOVE
Correct Answer
C
Question 10
THE PROCEDURE USED TO CONVERT EXPECTED FUTURE BENEFITS INTO PRESENT
VALUE IS
A. REDISUAL ANALYSIS
B. CAPITALIZATION
C. MARKET CAPITALIZATION
D. EQUITY CAPITALIZATION
E. COMPOUNDING
Correct Answer
B
Question 11
OPERATING INCOME DATA DO NOT INCLUDE
A. VACANCY RATE
B. REPRODUCTION COST
C. OPERATING EXPENSES
D. UTILITIES PROVIDED BY THE OWNER
E. LEASE TERMS
Correct Answer
B
Page 4 of 32
