PSI NATIONAL EXAM FOR REAL ESTATE LATEST
2024 400 QUESTIONS AND CORRECT DETAILED
ANSWERS |ALREADY GRADED A+
Which of the following are methods used by the federal reserve system to regulate the money supply?
-selling securities, printing money, and controlling lending underwriting requirements
-buying securities, changing the discount rate, and controlling banking reserves
-printing money, changing interest rates, and selling T-bills
-controlling the prime rate, trading securities, and purchasing loans - answer-buying securities,
changing the discount rate, and controlling banking reserves
What is the role of Fannie Mae in the secondary mortgage market? - answer-It purchases FHA-backed
and VA-backed loans.
What is the role of the federal housing authority in the mortgage lending market? - answer-It insures
loans made by approved lenders
What is the role of the veterans administration in the mortgage lending market? - answer-It
guarantees loans made by approved lenders.
In a buydown
-The lender lowers the interest rate on a loan in exchange for a pre-payment of the principal
-The borrower pays additional interest at the onset in order to obtain a lower interest rate
-The lender requires the borrower to buy down the price of the property by increasing the down
payment
-The borrower pays the lender additional funds to buy down the term of the loan - answer-The
borrower pays additional interest at the onset in order to obtain a lower interest rate
Two of the financial rewards that investments offer are - answer-income and tax benefits
,Six investors purchase a shopping center. One investor manages the tenants and another handles the
marketing and leasing. To investors manage accounting and finance, and the remaining to run the
management office. This is a possible example of
-a general partnership
-a limited partnership
-a real estate investment trust
-an investment conduit - answer-A general partnership. A general partnership is a syndicate in which
all members participate equally in managing the investment and in the profit or loss as it generates.
The formula for determining taxable income produced by an income property - answer-Gross income
minus expenses monies building depreciation
End arriving taxable income on an investment property, it is generally legal to
-deduct principal and interest payments from income
-deduct principal payments from income
-deduct interest payments from income
-deduct principal and interest payments from income and capital gain - answer-deduct interest
payments from income. Taxable income is net operating income minus all allowable deductions. The
interest portion of debt service is allowed and is deducted from net operating income as interest
expense.
The formula for calculating capital gains tax is the taxpayers bracket multiplied by
-The sum of the beginning basis plus gain
-The difference between amount realized and adjusted basis
-the sum of net sale proceeds and capital gain
-the difference between net sale proceeds and capital gain - answer-The difference between amount
realized and adjusted basis
Which of the following entities can legally levy annual real property taxes?
-the Internal Revenue Service
-a utility company
,-a tax district
-a court of law - answer-A tax district
What is the purpose of an equalization factor in ad valorem taxation?
-it modifies a local tax rate to bring it to conformity with statutory tax rates
-it changes the assessed value of an individual property to make it reflect the assessed values of other
properties in the same neighborhood
-it adjusts assessments in a locality to make them more consistent with an average level for the state or
other higher level jurisdiction
-it adjust the amount of homestead exemption in a certain area to make it proportionally equivalent to
the average homestead exemption in other areas - answer-it adjusts assessments in a locality to make
them more consistent with an average level for the state or other higher level jurisdiction
Mill rate ( tax rate ) = _____ / _____ - answer-Tax requirement divided by tax base
The formula for deriving a municipal jurisdiction's ad valorem tax base is
-the jurisdiction's annual budget times the tax rate
-the total of all assessed values of properties minus exemptions
-the total amount of ad valorem taxes required by the budget
-the municipality's budget multiplied times the millage rate - answer-the total of all assessed values of
properties minus exemptions
A homeowner's tax bill is derived by
-dividing the tax requirement by the tax base
-multiplying each districts tax rate times the market value
-multiplying each districts tax rate times the taxable value of the property
-averaging the tax rate for each tax district, and multiplying the average tax rate times the assessed value
- answer-multiplying each districts tax rate times the taxable value of the property
Redlining is specifically prohibited by - answer-The home mortgage disclosure act
, Title VIII of civil rights act of 1968 applies to the sale of
-all single family residences
-all privately owned single family residences
-privately owned single family residences by a broker
-privately owned single family residences for sale by owner - answer-privately owned single family
residences by a broker
A certain item is to be prorated between a buyer and seller. If no outside party is concerned, which of the
following statements is true?
-The item must be prorated and recorded as a debit to one party and a credit to the other for the same
amount
-The item must be prorated and recorded as a debit to one party; The remainder is recorded as a credit
to the other party
2024 400 QUESTIONS AND CORRECT DETAILED
ANSWERS |ALREADY GRADED A+
Which of the following are methods used by the federal reserve system to regulate the money supply?
-selling securities, printing money, and controlling lending underwriting requirements
-buying securities, changing the discount rate, and controlling banking reserves
-printing money, changing interest rates, and selling T-bills
-controlling the prime rate, trading securities, and purchasing loans - answer-buying securities,
changing the discount rate, and controlling banking reserves
What is the role of Fannie Mae in the secondary mortgage market? - answer-It purchases FHA-backed
and VA-backed loans.
What is the role of the federal housing authority in the mortgage lending market? - answer-It insures
loans made by approved lenders
What is the role of the veterans administration in the mortgage lending market? - answer-It
guarantees loans made by approved lenders.
In a buydown
-The lender lowers the interest rate on a loan in exchange for a pre-payment of the principal
-The borrower pays additional interest at the onset in order to obtain a lower interest rate
-The lender requires the borrower to buy down the price of the property by increasing the down
payment
-The borrower pays the lender additional funds to buy down the term of the loan - answer-The
borrower pays additional interest at the onset in order to obtain a lower interest rate
Two of the financial rewards that investments offer are - answer-income and tax benefits
,Six investors purchase a shopping center. One investor manages the tenants and another handles the
marketing and leasing. To investors manage accounting and finance, and the remaining to run the
management office. This is a possible example of
-a general partnership
-a limited partnership
-a real estate investment trust
-an investment conduit - answer-A general partnership. A general partnership is a syndicate in which
all members participate equally in managing the investment and in the profit or loss as it generates.
The formula for determining taxable income produced by an income property - answer-Gross income
minus expenses monies building depreciation
End arriving taxable income on an investment property, it is generally legal to
-deduct principal and interest payments from income
-deduct principal payments from income
-deduct interest payments from income
-deduct principal and interest payments from income and capital gain - answer-deduct interest
payments from income. Taxable income is net operating income minus all allowable deductions. The
interest portion of debt service is allowed and is deducted from net operating income as interest
expense.
The formula for calculating capital gains tax is the taxpayers bracket multiplied by
-The sum of the beginning basis plus gain
-The difference between amount realized and adjusted basis
-the sum of net sale proceeds and capital gain
-the difference between net sale proceeds and capital gain - answer-The difference between amount
realized and adjusted basis
Which of the following entities can legally levy annual real property taxes?
-the Internal Revenue Service
-a utility company
,-a tax district
-a court of law - answer-A tax district
What is the purpose of an equalization factor in ad valorem taxation?
-it modifies a local tax rate to bring it to conformity with statutory tax rates
-it changes the assessed value of an individual property to make it reflect the assessed values of other
properties in the same neighborhood
-it adjusts assessments in a locality to make them more consistent with an average level for the state or
other higher level jurisdiction
-it adjust the amount of homestead exemption in a certain area to make it proportionally equivalent to
the average homestead exemption in other areas - answer-it adjusts assessments in a locality to make
them more consistent with an average level for the state or other higher level jurisdiction
Mill rate ( tax rate ) = _____ / _____ - answer-Tax requirement divided by tax base
The formula for deriving a municipal jurisdiction's ad valorem tax base is
-the jurisdiction's annual budget times the tax rate
-the total of all assessed values of properties minus exemptions
-the total amount of ad valorem taxes required by the budget
-the municipality's budget multiplied times the millage rate - answer-the total of all assessed values of
properties minus exemptions
A homeowner's tax bill is derived by
-dividing the tax requirement by the tax base
-multiplying each districts tax rate times the market value
-multiplying each districts tax rate times the taxable value of the property
-averaging the tax rate for each tax district, and multiplying the average tax rate times the assessed value
- answer-multiplying each districts tax rate times the taxable value of the property
Redlining is specifically prohibited by - answer-The home mortgage disclosure act
, Title VIII of civil rights act of 1968 applies to the sale of
-all single family residences
-all privately owned single family residences
-privately owned single family residences by a broker
-privately owned single family residences for sale by owner - answer-privately owned single family
residences by a broker
A certain item is to be prorated between a buyer and seller. If no outside party is concerned, which of the
following statements is true?
-The item must be prorated and recorded as a debit to one party and a credit to the other for the same
amount
-The item must be prorated and recorded as a debit to one party; The remainder is recorded as a credit
to the other party
