ESTUDYR
AYPO REAL ESTATE PRINCIPLES OF REAL ESTATE II EXAM STUDY GUIDE MOST
TESTED QUESTIONS AND ANSWERS GRADED A+ WITH RATIONALE
If the base side of a triangular plot measures 45′ and the height is 12′, what is the area?
A. 135 sq ft
B. 270 sq ft
C. 540 sq ft
D. 324 sq ft
Rationale: Area = ½ × base × height = 0.5 × 45 × 12 = 270.
An applicant may use which electronic device during the real estate exam?
A. Smartphone
B. Tablet
C. Hand-held calculator
D. Laptop computer
Rationale: Only simple, hand-held calculators are permitted; no internet-enabled devices.
Convert 31/25 to a decimal.
A. 1.12
B. 1.24
C. 1.3
D. 0.81
Rationale: 31 ÷ 25 = 1.24.
General formula for capital gain is:
A. Sale Price − Purchase Price
B. Net Proceeds − Expenses
C. Profit from Sale − Base Value
D. Adjusted Basis + Improvements
Rationale: Capital gain = amount realized minus the asset’s tax basis (base value).
If a property owner borrows $490,000 at 12% annual interest, how much interest accumulates in
year one?
A. $4,900
B. $29,400
C. $58,800
D. $98,000
Rationale: Interest = principal × rate = 490,000 × 0.12 = 58,800.
,ESTUDYR
A 20-year mortgage of $97,500 at 7.5% APR has monthly payments of approximately:
A. $650.12
B. $712.45
C. $784.87
D. $820.33
Rationale: Using standard amortization formula yields ≈$784.87/month.
Basic formula for proration of fees is:
A. (Tax Rate ÷ Total Days)
B. (Daily Rate × Days Used)
C. Tax or Fee Rate × Remaining Days (or Months)
D. (Annual Fee ÷ 12)
Rationale: Prorated fee = rate × portion of period remaining.
A house has three rectangles: A=20′×30′, B=10′×10′, C=75′×50′. Total square footage is:
A. 4,150 ft²
B. 4,200 ft²
C. 4,450 ft²
D. 4,650 ft²
Rationale: 20×30 + 10×10 + 75×50 = 600 + 100 + 3,750 = 4,450.
Minimum acceptable appraisal experience hours over 12 months:
A. 1,200
B. 1,500
C. 2,000
D. 2,500
Rationale: Appraisal applicants must document at least 1,500 hours.
Functional obsolescence is:
A. Decline from market downturn
B. Loss due to neighborhood decline
C. Loss of value from property features that can’t be easily changed
D. Loss from physical deterioration
Rationale: It stems from design or layout deficiencies.
The most probable price under fair-sale conditions is called:
A. Assessed value
B. Investment value
C. Market value
D. Insured value
,ESTUDYR
Rationale: Market value assumes prudent, knowledgeable buyer and seller.
“Anticipation” in appraisal refers to:
A. Immediate value increase
B. Value change due to expected future benefits or costs
C. Time-adjusted depreciation
D. Risk premium
Rationale: Buyers pay for future income or perceive potential risks.
Replacement cost (not exact duplicate) is used in the:
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Gross rent multiplier
Rationale: Cost approach estimates what it would cost to build today.
A CMA stands for:
A. Certified Mortgage Appraiser
B. Cost Market Analysis
C. Comparative Market Analysis
D. Capital Market Assessment
Rationale: CMA is an informal estimate of value by comparing similar properties.
Fees paid to lenders for loan evaluation, processing, and approval are called:
A. Discount points
B. Origination points
C. Brokerage fees
D. Underwriting fees
Rationale: Origination points compensate the lender for loan origination.
A privately run, for-profit institution offering mortgages is a:
A. Credit union
B. Savings & loan
C. Bank
D. Non-profit lender
Rationale: Banks are for-profit and offer a range of financial services.
In which payment plan does the borrower pay less initially, then more later?
A. Graduated payment mortgage
B. Balloon mortgage
, ESTUDYR
C. Flexible payment plan
D. Interest-only loan
Rationale: Flexible plan has lower early payments that escalate.
The federal program “Making Home Affordable” helps homeowners avoid:
A. Down-payment requirements
B. Market declines
C. Foreclosure
D. Title defects
Rationale: It provides loan modification and refinancing assistance.
A Veterans Land Board (VLB) requirement is that the home remain the veteran’s primary residence
for:
A. 1 year
B. 2 years
C. 3 years
D. 5 years
Rationale: Texas VLB program mandates a three-year occupancy.
The Federal Reserve System does not directly control:
A. Open market operations
B. Reserve requirements
C. Discount rate
D. Levels of employment
Rationale: The Fed influences employment but cannot set it directly.
In secondary capital markets:
A. New securities are issued
B. Mortgage loans are originated
C. Investors trade existing securities among themselves
D. Central banks lend to commercial banks
Rationale: Secondary markets facilitate liquidity for previously issued instruments.
An alternative for buyers unable to get conventional financing is:
A. FHA loan
B. VA loan
C. USDA loan
D. Private lending
Rationale: Private lenders can underwrite when institutional criteria aren’t met.
AYPO REAL ESTATE PRINCIPLES OF REAL ESTATE II EXAM STUDY GUIDE MOST
TESTED QUESTIONS AND ANSWERS GRADED A+ WITH RATIONALE
If the base side of a triangular plot measures 45′ and the height is 12′, what is the area?
A. 135 sq ft
B. 270 sq ft
C. 540 sq ft
D. 324 sq ft
Rationale: Area = ½ × base × height = 0.5 × 45 × 12 = 270.
An applicant may use which electronic device during the real estate exam?
A. Smartphone
B. Tablet
C. Hand-held calculator
D. Laptop computer
Rationale: Only simple, hand-held calculators are permitted; no internet-enabled devices.
Convert 31/25 to a decimal.
A. 1.12
B. 1.24
C. 1.3
D. 0.81
Rationale: 31 ÷ 25 = 1.24.
General formula for capital gain is:
A. Sale Price − Purchase Price
B. Net Proceeds − Expenses
C. Profit from Sale − Base Value
D. Adjusted Basis + Improvements
Rationale: Capital gain = amount realized minus the asset’s tax basis (base value).
If a property owner borrows $490,000 at 12% annual interest, how much interest accumulates in
year one?
A. $4,900
B. $29,400
C. $58,800
D. $98,000
Rationale: Interest = principal × rate = 490,000 × 0.12 = 58,800.
,ESTUDYR
A 20-year mortgage of $97,500 at 7.5% APR has monthly payments of approximately:
A. $650.12
B. $712.45
C. $784.87
D. $820.33
Rationale: Using standard amortization formula yields ≈$784.87/month.
Basic formula for proration of fees is:
A. (Tax Rate ÷ Total Days)
B. (Daily Rate × Days Used)
C. Tax or Fee Rate × Remaining Days (or Months)
D. (Annual Fee ÷ 12)
Rationale: Prorated fee = rate × portion of period remaining.
A house has three rectangles: A=20′×30′, B=10′×10′, C=75′×50′. Total square footage is:
A. 4,150 ft²
B. 4,200 ft²
C. 4,450 ft²
D. 4,650 ft²
Rationale: 20×30 + 10×10 + 75×50 = 600 + 100 + 3,750 = 4,450.
Minimum acceptable appraisal experience hours over 12 months:
A. 1,200
B. 1,500
C. 2,000
D. 2,500
Rationale: Appraisal applicants must document at least 1,500 hours.
Functional obsolescence is:
A. Decline from market downturn
B. Loss due to neighborhood decline
C. Loss of value from property features that can’t be easily changed
D. Loss from physical deterioration
Rationale: It stems from design or layout deficiencies.
The most probable price under fair-sale conditions is called:
A. Assessed value
B. Investment value
C. Market value
D. Insured value
,ESTUDYR
Rationale: Market value assumes prudent, knowledgeable buyer and seller.
“Anticipation” in appraisal refers to:
A. Immediate value increase
B. Value change due to expected future benefits or costs
C. Time-adjusted depreciation
D. Risk premium
Rationale: Buyers pay for future income or perceive potential risks.
Replacement cost (not exact duplicate) is used in the:
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Gross rent multiplier
Rationale: Cost approach estimates what it would cost to build today.
A CMA stands for:
A. Certified Mortgage Appraiser
B. Cost Market Analysis
C. Comparative Market Analysis
D. Capital Market Assessment
Rationale: CMA is an informal estimate of value by comparing similar properties.
Fees paid to lenders for loan evaluation, processing, and approval are called:
A. Discount points
B. Origination points
C. Brokerage fees
D. Underwriting fees
Rationale: Origination points compensate the lender for loan origination.
A privately run, for-profit institution offering mortgages is a:
A. Credit union
B. Savings & loan
C. Bank
D. Non-profit lender
Rationale: Banks are for-profit and offer a range of financial services.
In which payment plan does the borrower pay less initially, then more later?
A. Graduated payment mortgage
B. Balloon mortgage
, ESTUDYR
C. Flexible payment plan
D. Interest-only loan
Rationale: Flexible plan has lower early payments that escalate.
The federal program “Making Home Affordable” helps homeowners avoid:
A. Down-payment requirements
B. Market declines
C. Foreclosure
D. Title defects
Rationale: It provides loan modification and refinancing assistance.
A Veterans Land Board (VLB) requirement is that the home remain the veteran’s primary residence
for:
A. 1 year
B. 2 years
C. 3 years
D. 5 years
Rationale: Texas VLB program mandates a three-year occupancy.
The Federal Reserve System does not directly control:
A. Open market operations
B. Reserve requirements
C. Discount rate
D. Levels of employment
Rationale: The Fed influences employment but cannot set it directly.
In secondary capital markets:
A. New securities are issued
B. Mortgage loans are originated
C. Investors trade existing securities among themselves
D. Central banks lend to commercial banks
Rationale: Secondary markets facilitate liquidity for previously issued instruments.
An alternative for buyers unable to get conventional financing is:
A. FHA loan
B. VA loan
C. USDA loan
D. Private lending
Rationale: Private lenders can underwrite when institutional criteria aren’t met.
