SOUTH CAROLINA PSI EXAM PREP
QUESTIONS WITH COMPLETE
ANSWERS
Amira's xrrseller xrrTom xrrjust xrrreceived xrrthe xrrnews xrrthat xrrhis xrrbuyers xrrare xrrwalking
xrraway xrrfrom xrrthe xrrsale. xrrThey xrrweren't xrrwilling xrrto xrrproceed xrrafter xrrthey xrrsaw
xrrthe xrrinspection xrrreport. xrrNeither xrrAmira xrrnor xrrTom xrrhas xrrrequested xrra xrrcopy
xrrof xrrthe xrrreport. xrrWhat's xrrthe xrrmost xrrlikely xrrreason xrrfor xrrthat?
1. xrrAmira xrrdoesn't xrrtrust xrrthis xrrparticular xrrinspection xrrcompany.
2. xrrIf xrrthey xrrsee xrrthe xrrreport, xrrthey'll xrrbe xrrrequired xrrto xrrdisclose xrrany xrradverse
xrrfindings. xrr
3. xrrThey xrrare xrrunwilling xrrto xrrpay xrrfor xrrthe xrrreport xrras xrrthe xrrbuyer xrrrequires.
4. xrrTom xrrwants xrrto xrrpay xrrfor xrrhis xrrown xrrinspector xrrso xrrthat xrrhe xrrcan xrrquestion
xrrthe xrrinspector. xrr- xrrAnswerIf xrrthey xrrsee xrrthe xrrreport, xrrthey'll xrrbe xrrrequired xrrto
xrrdisclose xrrany xrradverse xrrfindings. xrr
NOTE: xrrSome xrrlicensees xrr(and xrrsellers) xrrmay xrropt xrrNOT xrrto xrrsee xrrthe
xrrinspection xrrreport xrrso xrrthat xrrthey xrrdon't xrrlearn xrrabout xrrany xrradverse xrrmaterial
xrrfacts xrrwhich xrrthen xrrmust xrrbe xrrdisclosed. xrrThey xrrmay xrralso xrrbe xrrconcerned
xrrabout xrrthe xrraccuracy xrrof xrrthe xrrreport.
Which xrrof xrrthe xrrfollowing xrris xrrtrue xrrabout xrrair xrrrights?
1. xrrThey xrrare xrrthe xrrright xrrto xrruse xrrthe xrropen xrrspace xrrabove xrrbuildings.
2. xrrThey xrrare xrrthe xrrright xrrto xrruse xrrthe xrrspace xrrdirectly xrrbelow xrrbuildings.
3. xrrThey xrrcannot xrrbe xrrbought xrror xrrsold.
,4. xrrThey xrrinclude xrrmineral xrrrights. xrr- xrrAnswerThey xrrare xrrthe xrrright xrrto xrruse xrrthe
xrropen xrrspace xrrabove xrrbuildings.
NOTE: xrrAir xrrrights xrrinvolve xrrthe xrrright xrrto xrruse xrrthe xrropen xrrspace xrrabove
xrrbuildings xrrup xrrto xrra xrrheight xrrestablished xrrby xrrlaw.
Jacob's xrrfamily xrrhas xrroperated xrra xrrneighborhood xrrgrocery xrrstore xrrin xrrthe
xrrcommunity xrrsince xrrbefore xrrthe xrrland xrrwas xrrzoned xrrresidential. xrrJacob
xrrcontinues xrrto xrroperate xrrthe xrrstore xrrlegally. xrrWhat xrrwould xrryou xrrcall xrrthis?
1. xrrMixed xrruse
2. xrrNon-conforming xrruse
3. xrrResidential xrrretail xrruse
4. xrrSpecial xrruse xrr- xrrAnswerNon-conforming xrruse
NOTE: xrrLegal, xrrnon-conforming xrruse xrrof xrrland xrroccurs xrrwhen xrra xrrstructure xrror
xrrbusiness xrrwas xrrlegally xrrestablished xrraccording xrrto xrrzoning xrrordinances xrrat xrrthe
xrrtime, xrrbut xrrdoes xrrnot xrrmeet xrrcurrent xrrzoning xrrand xrrbuilding xrrregulations. xrrThis
xrris xrrcalled xrrbeing xrr"grandfathered."
If xrrthere xrris xrrsome xrrkind xrrof xrrdefect xrron xrra xrrproperty's xrrtitle, xrrwhat xrreffect xrrdoes
xrrthis xrrlevel xrrof xrrtransferability xrrhave xrron xrrthe xrrproperty's xrrvalue?
1. xrrThe xrrvalue xrrremains xrrunchanged.
2. xrrThe xrrvalue xrrwill xrrfall.
3. xrrThe xrrvalue xrrwill xrrrise.
4. xrrTransferability xrrhas xrrno xrreffect xrron xrrvalue. xrr- xrrAnswerThe xrrvalue xrrwill xrrfall.
If xrra xrrproperty xrrcan't xrrbe xrreasily xrrtransferred, xrrthis xrrwill xrrhave xrra xrrnegative
xrreffect xrron xrrvalue, xrrcausing xrrit xrrto xrrfall.
A xrrstrip xrrmall xrrvalued xrrat xrr$850,000 xrrhas xrra xrr$67,500 xrrannual xrrnet xrroperating
income. xrrWhat xrris xrrthe xrrcapitalization xrrrate xrrfor xrrthe xrrstrip xrrmall?
1. xrr12.59%
2. xrr7.9%
, 3. xrr8.67%
4. xrr9.2% xrr- xrrAnswer7.9% xrr
NOTE: xrrThe xrrcap xrrrate xrrformula xrris: xrrnet xrroperating xrrincome xrr÷ xrrvalue xrr= xrrrate
xrr(I xrr÷ xrrV xrr= xrrR). xrrSo xrr$67,500 xrr÷ xrr$850,000 xrr= xrr.
079 xrror xrr7.9%. xrrThis xrrformula xrrcan xrrwork xrrin xrrreverse xrras xrrwell: xrrvalue
xrr(purchase xrrprice) xrr× xrrcap xrrrate xrr= xrrnet
operating xrrincome xrr(V xrr× xrrR xrr= xrrI).
When xrragents xrrput xrrtheir xrrclients' xrrinterests xrrahead xrrof xrrtheir xrrown, xrrthis
xrrdescribes xrrthe xrrduty xrrof xrr______. xrr
1. xrrAccounting
2. xrrLoyalty
3. xrrObedience
4. xrrReasonable xrrskill xrrand xrrcare xrr- xrrAnswerLoyalty
NOTE: xrrLoyalty xrrmeans xrrputting xrrthe xrrclient's xrrinterests xrrfirst xrr... xrrahead xrrof
xrrcustomers' xrrinterests xrrand xrrahead xrrof xrryour xrrown.
Four xrrbrokerage xrrfirms xrroperate xrrin xrrthe xrrsame xrrsmall xrrcity xrras xrrJackson's xrrfirm.
xrrAll xrrthe xrrfirms xrrcharge xrrapproximately xrrthe xrrsame xrrlisting xrrcommission xrrand
xrrpay xrrapproximately xrrthe xrrsame xrrcooperating xrrcommission xrrto xrrthe xrrselling
xrrbroker. xrrThe xrrcommission xrrsplits xrrwithin xrreach xrrfirm xrrare xrralso xrrsimilar. xrrIs xrrthis
xrran xrrantitrust xrrviolation? xrrWhy xrror xrrwhy xrrnot?
1. xrrNo. xrrThe xrrfact xrrthat xrrthe xrrfirms' xrrcommission xrrrates xrrand xrrsplits xrrare xrrsimilar
xrrdoesn't xrrnecessarily xrrmean xrrthey xrragreed xrrto xrrfix xrrthose xrrvalues. xrr
2. xrrNo. xrrThe xrrsimilarities xrrbetween xrrcommission xrrrates xrrmay xrrbe xrrsuspect, xrrbut
xrrthe xrrsimilarity xrrbetween xrrcommission xrrsplits xrrdoesn't xrrmatter.
3. xrrYes. xrrThe xrrfact xrrthat xrrthe xrrfirm's xrrcommission xrrrates xrrand xrrsplits xrrare xrrso
xrrsimilar xrris xrra xrrrestraint xrrof xrrtrade. xrr
4. xrrYes. xrrThe xrrfirms' xrrinternal xrrcommission xrrsplits xrrcan xrrbe xrrthe xrrsame, xrrbut
xrrthey xrrcan't xrrall xrrcharge xrrthe xrrsame xrrcommission xrrrate. xrr- xrrAnswerNo. xrrThe
xrrfact xrrthat xrrthe xrrfirms' xrrcommission xrrrates xrrand xrrsplits xrrare xrrsimilar xrrdoesn't
xrrnecessarily xrrmean xrrthey xrragreed xrrto xrrfix xrrthose xrrvalues.
QUESTIONS WITH COMPLETE
ANSWERS
Amira's xrrseller xrrTom xrrjust xrrreceived xrrthe xrrnews xrrthat xrrhis xrrbuyers xrrare xrrwalking
xrraway xrrfrom xrrthe xrrsale. xrrThey xrrweren't xrrwilling xrrto xrrproceed xrrafter xrrthey xrrsaw
xrrthe xrrinspection xrrreport. xrrNeither xrrAmira xrrnor xrrTom xrrhas xrrrequested xrra xrrcopy
xrrof xrrthe xrrreport. xrrWhat's xrrthe xrrmost xrrlikely xrrreason xrrfor xrrthat?
1. xrrAmira xrrdoesn't xrrtrust xrrthis xrrparticular xrrinspection xrrcompany.
2. xrrIf xrrthey xrrsee xrrthe xrrreport, xrrthey'll xrrbe xrrrequired xrrto xrrdisclose xrrany xrradverse
xrrfindings. xrr
3. xrrThey xrrare xrrunwilling xrrto xrrpay xrrfor xrrthe xrrreport xrras xrrthe xrrbuyer xrrrequires.
4. xrrTom xrrwants xrrto xrrpay xrrfor xrrhis xrrown xrrinspector xrrso xrrthat xrrhe xrrcan xrrquestion
xrrthe xrrinspector. xrr- xrrAnswerIf xrrthey xrrsee xrrthe xrrreport, xrrthey'll xrrbe xrrrequired xrrto
xrrdisclose xrrany xrradverse xrrfindings. xrr
NOTE: xrrSome xrrlicensees xrr(and xrrsellers) xrrmay xrropt xrrNOT xrrto xrrsee xrrthe
xrrinspection xrrreport xrrso xrrthat xrrthey xrrdon't xrrlearn xrrabout xrrany xrradverse xrrmaterial
xrrfacts xrrwhich xrrthen xrrmust xrrbe xrrdisclosed. xrrThey xrrmay xrralso xrrbe xrrconcerned
xrrabout xrrthe xrraccuracy xrrof xrrthe xrrreport.
Which xrrof xrrthe xrrfollowing xrris xrrtrue xrrabout xrrair xrrrights?
1. xrrThey xrrare xrrthe xrrright xrrto xrruse xrrthe xrropen xrrspace xrrabove xrrbuildings.
2. xrrThey xrrare xrrthe xrrright xrrto xrruse xrrthe xrrspace xrrdirectly xrrbelow xrrbuildings.
3. xrrThey xrrcannot xrrbe xrrbought xrror xrrsold.
,4. xrrThey xrrinclude xrrmineral xrrrights. xrr- xrrAnswerThey xrrare xrrthe xrrright xrrto xrruse xrrthe
xrropen xrrspace xrrabove xrrbuildings.
NOTE: xrrAir xrrrights xrrinvolve xrrthe xrrright xrrto xrruse xrrthe xrropen xrrspace xrrabove
xrrbuildings xrrup xrrto xrra xrrheight xrrestablished xrrby xrrlaw.
Jacob's xrrfamily xrrhas xrroperated xrra xrrneighborhood xrrgrocery xrrstore xrrin xrrthe
xrrcommunity xrrsince xrrbefore xrrthe xrrland xrrwas xrrzoned xrrresidential. xrrJacob
xrrcontinues xrrto xrroperate xrrthe xrrstore xrrlegally. xrrWhat xrrwould xrryou xrrcall xrrthis?
1. xrrMixed xrruse
2. xrrNon-conforming xrruse
3. xrrResidential xrrretail xrruse
4. xrrSpecial xrruse xrr- xrrAnswerNon-conforming xrruse
NOTE: xrrLegal, xrrnon-conforming xrruse xrrof xrrland xrroccurs xrrwhen xrra xrrstructure xrror
xrrbusiness xrrwas xrrlegally xrrestablished xrraccording xrrto xrrzoning xrrordinances xrrat xrrthe
xrrtime, xrrbut xrrdoes xrrnot xrrmeet xrrcurrent xrrzoning xrrand xrrbuilding xrrregulations. xrrThis
xrris xrrcalled xrrbeing xrr"grandfathered."
If xrrthere xrris xrrsome xrrkind xrrof xrrdefect xrron xrra xrrproperty's xrrtitle, xrrwhat xrreffect xrrdoes
xrrthis xrrlevel xrrof xrrtransferability xrrhave xrron xrrthe xrrproperty's xrrvalue?
1. xrrThe xrrvalue xrrremains xrrunchanged.
2. xrrThe xrrvalue xrrwill xrrfall.
3. xrrThe xrrvalue xrrwill xrrrise.
4. xrrTransferability xrrhas xrrno xrreffect xrron xrrvalue. xrr- xrrAnswerThe xrrvalue xrrwill xrrfall.
If xrra xrrproperty xrrcan't xrrbe xrreasily xrrtransferred, xrrthis xrrwill xrrhave xrra xrrnegative
xrreffect xrron xrrvalue, xrrcausing xrrit xrrto xrrfall.
A xrrstrip xrrmall xrrvalued xrrat xrr$850,000 xrrhas xrra xrr$67,500 xrrannual xrrnet xrroperating
income. xrrWhat xrris xrrthe xrrcapitalization xrrrate xrrfor xrrthe xrrstrip xrrmall?
1. xrr12.59%
2. xrr7.9%
, 3. xrr8.67%
4. xrr9.2% xrr- xrrAnswer7.9% xrr
NOTE: xrrThe xrrcap xrrrate xrrformula xrris: xrrnet xrroperating xrrincome xrr÷ xrrvalue xrr= xrrrate
xrr(I xrr÷ xrrV xrr= xrrR). xrrSo xrr$67,500 xrr÷ xrr$850,000 xrr= xrr.
079 xrror xrr7.9%. xrrThis xrrformula xrrcan xrrwork xrrin xrrreverse xrras xrrwell: xrrvalue
xrr(purchase xrrprice) xrr× xrrcap xrrrate xrr= xrrnet
operating xrrincome xrr(V xrr× xrrR xrr= xrrI).
When xrragents xrrput xrrtheir xrrclients' xrrinterests xrrahead xrrof xrrtheir xrrown, xrrthis
xrrdescribes xrrthe xrrduty xrrof xrr______. xrr
1. xrrAccounting
2. xrrLoyalty
3. xrrObedience
4. xrrReasonable xrrskill xrrand xrrcare xrr- xrrAnswerLoyalty
NOTE: xrrLoyalty xrrmeans xrrputting xrrthe xrrclient's xrrinterests xrrfirst xrr... xrrahead xrrof
xrrcustomers' xrrinterests xrrand xrrahead xrrof xrryour xrrown.
Four xrrbrokerage xrrfirms xrroperate xrrin xrrthe xrrsame xrrsmall xrrcity xrras xrrJackson's xrrfirm.
xrrAll xrrthe xrrfirms xrrcharge xrrapproximately xrrthe xrrsame xrrlisting xrrcommission xrrand
xrrpay xrrapproximately xrrthe xrrsame xrrcooperating xrrcommission xrrto xrrthe xrrselling
xrrbroker. xrrThe xrrcommission xrrsplits xrrwithin xrreach xrrfirm xrrare xrralso xrrsimilar. xrrIs xrrthis
xrran xrrantitrust xrrviolation? xrrWhy xrror xrrwhy xrrnot?
1. xrrNo. xrrThe xrrfact xrrthat xrrthe xrrfirms' xrrcommission xrrrates xrrand xrrsplits xrrare xrrsimilar
xrrdoesn't xrrnecessarily xrrmean xrrthey xrragreed xrrto xrrfix xrrthose xrrvalues. xrr
2. xrrNo. xrrThe xrrsimilarities xrrbetween xrrcommission xrrrates xrrmay xrrbe xrrsuspect, xrrbut
xrrthe xrrsimilarity xrrbetween xrrcommission xrrsplits xrrdoesn't xrrmatter.
3. xrrYes. xrrThe xrrfact xrrthat xrrthe xrrfirm's xrrcommission xrrrates xrrand xrrsplits xrrare xrrso
xrrsimilar xrris xrra xrrrestraint xrrof xrrtrade. xrr
4. xrrYes. xrrThe xrrfirms' xrrinternal xrrcommission xrrsplits xrrcan xrrbe xrrthe xrrsame, xrrbut
xrrthey xrrcan't xrrall xrrcharge xrrthe xrrsame xrrcommission xrrrate. xrr- xrrAnswerNo. xrrThe
xrrfact xrrthat xrrthe xrrfirms' xrrcommission xrrrates xrrand xrrsplits xrrare xrrsimilar xrrdoesn't
xrrnecessarily xrrmean xrrthey xrragreed xrrto xrrfix xrrthose xrrvalues.
