Champions Real Estate Finance Exam
#1 2025 || Complete Questions &
Answers (100% Correct)
Insurance Companies - ANSWER - These receive periodic, lump sum payments from
individuals or organizations in exchange for a promise to make future payments if
certain events occur.
Pension Funds - ANSWER - These pool the contributions of employees and invest the
funds similarly to insurance companies.
1970 - ANSWER - Alternative mortgage instruments were introduced after what year?
Economic Recovery Tax Act of 1981 - ANSWER - The act congress passed in the 80s
that majorly increased tax incentives for investing in real estate.
Commercial Mortgage Backed Securities - ANSWER - The method of conduit financing
wildly popular in the 90s.
Primary Mortgage Market - ANSWER - The market where loans are originated.
Primary Market - ANSWER - Who holds the risk if the mortgage cannot be sold in the
secondary market?
Secondary Market - ANSWER - The market where existing mortgages are bought and
sold.
Liquid - ANSWER - A large or active secondary market makes securities more?
Money Markets and Capital Markets - ANSWER - What are the two categories of
financial markets?
Money Markets - ANSWER - Type of financial market which deals with short term
securities (usually one year or less to maturity).
Capital Markets - ANSWER - Type of financial market which deals with long term
securities (usually one year or less to maturity).
Capital Markets - ANSWER - Most real estate financing occurs in which type of financial
market?
Asset Valuation - ANSWER - This depends on the amount, timing, and risk associated
with the asset's cash flows.
, Discounted Cash Flows (Basic Valuation Equation) - ANSWER - This method of asset
valuation applies to any asset that is capable of providing cash flows to the owner.
NOI - ANSWER - Cash flows before capital expenditures, debt service and taxes.
Real Estate Finance - ANSWER - The study of the institutions, markets and instruments
used to transfer money and credit for the purpose of developing or acquiring real
property.
Real Property - ANSWER - The rights, power, and privileges associated with the use of
real estate.
Real Estate - ANSWER - Land and all fixed immovable improvements on it.
Financial Instruments - ANSWER - Are used to transfer money and credit for the
purpose of developing and acquiring real property
.Environment of Real Estate Finance - ANSWER - The institutions that create and
purchase those instruments and the markets in which they are traded constitute the?
Cost, Risk, and Yield - ANSWER - The three unifying factors which drive all rational
financial decisions.
Borrowing Costs - ANSWER - A critical factor in determining the supply side of the real
estate supply and demand equation.
Passive Investors - ANSWER - Investor type which puts money at risk and has no
control.
Active Investors - ANSWER - Investor type which makes decisions that influence an
investments return.
Debt Position - ANSWER - The position in which an investor lends money and expects
to recover principle and interest.
Equity Investors - ANSWER - Investors who acquire an actual ownership interest in real
estate assets.
Financial Intermediaries - ANSWER - Financial Institutions who facilitate the flow of
funds from the surplus income (savers) units to the deficit Income (borrowers) units.
Commercial Banks - ANSWER - Institutions accepting demand (checking) and time
(CDs & Savings) deposits.
#1 2025 || Complete Questions &
Answers (100% Correct)
Insurance Companies - ANSWER - These receive periodic, lump sum payments from
individuals or organizations in exchange for a promise to make future payments if
certain events occur.
Pension Funds - ANSWER - These pool the contributions of employees and invest the
funds similarly to insurance companies.
1970 - ANSWER - Alternative mortgage instruments were introduced after what year?
Economic Recovery Tax Act of 1981 - ANSWER - The act congress passed in the 80s
that majorly increased tax incentives for investing in real estate.
Commercial Mortgage Backed Securities - ANSWER - The method of conduit financing
wildly popular in the 90s.
Primary Mortgage Market - ANSWER - The market where loans are originated.
Primary Market - ANSWER - Who holds the risk if the mortgage cannot be sold in the
secondary market?
Secondary Market - ANSWER - The market where existing mortgages are bought and
sold.
Liquid - ANSWER - A large or active secondary market makes securities more?
Money Markets and Capital Markets - ANSWER - What are the two categories of
financial markets?
Money Markets - ANSWER - Type of financial market which deals with short term
securities (usually one year or less to maturity).
Capital Markets - ANSWER - Type of financial market which deals with long term
securities (usually one year or less to maturity).
Capital Markets - ANSWER - Most real estate financing occurs in which type of financial
market?
Asset Valuation - ANSWER - This depends on the amount, timing, and risk associated
with the asset's cash flows.
, Discounted Cash Flows (Basic Valuation Equation) - ANSWER - This method of asset
valuation applies to any asset that is capable of providing cash flows to the owner.
NOI - ANSWER - Cash flows before capital expenditures, debt service and taxes.
Real Estate Finance - ANSWER - The study of the institutions, markets and instruments
used to transfer money and credit for the purpose of developing or acquiring real
property.
Real Property - ANSWER - The rights, power, and privileges associated with the use of
real estate.
Real Estate - ANSWER - Land and all fixed immovable improvements on it.
Financial Instruments - ANSWER - Are used to transfer money and credit for the
purpose of developing and acquiring real property
.Environment of Real Estate Finance - ANSWER - The institutions that create and
purchase those instruments and the markets in which they are traded constitute the?
Cost, Risk, and Yield - ANSWER - The three unifying factors which drive all rational
financial decisions.
Borrowing Costs - ANSWER - A critical factor in determining the supply side of the real
estate supply and demand equation.
Passive Investors - ANSWER - Investor type which puts money at risk and has no
control.
Active Investors - ANSWER - Investor type which makes decisions that influence an
investments return.
Debt Position - ANSWER - The position in which an investor lends money and expects
to recover principle and interest.
Equity Investors - ANSWER - Investors who acquire an actual ownership interest in real
estate assets.
Financial Intermediaries - ANSWER - Financial Institutions who facilitate the flow of
funds from the surplus income (savers) units to the deficit Income (borrowers) units.
Commercial Banks - ANSWER - Institutions accepting demand (checking) and time
(CDs & Savings) deposits.
