Pearson VUE Practice Test Questions
and Answers | Latest Version |
2025/2026 | Correct & Verified
What is the primary advantage of investing in real estate?
A. Guaranteed profits
✔✔ B. Potential for long-term appreciation
C. Immediate liquidity
D. Tax-free income
What does a deductible in an insurance policy represent?
A. The total coverage limit
✔✔ B. The amount paid out-of-pocket before coverage begins
C. The monthly premium
D. The cost to replace damaged items
Which of the following best describes a fixed-rate mortgage?
✔✔ A. A loan with a constant interest rate over the term
B. A loan with payments that decrease each year
1
,C. A loan with adjustable payments every quarter
D. A short-term loan for investors
Which financial metric helps evaluate rental income potential quickly?
✔✔ A. Gross Rent Multiplier
B. Internal Rate of Return
C. Net Present Value
D. Depreciation Expense
Why do lenders often require title insurance during real estate transactions?
A. To protect the real estate agent from losses
✔✔ B. To protect the lender from title disputes
C. To cover structural damage
D. To ensure the seller receives their commission
Which of the following is considered personal property?
A. Land
B. House foundation
2
,✔✔ C. Refrigerator
D. Attached garage
What is one major benefit of owning rental property?
A. Elimination of all taxes
B. No maintenance responsibilities
✔✔ C. Passive income generation
D. Government rent guarantees
Which type of insurance covers injuries to third parties on your property?
A. Dwelling coverage
B. Contents insurance
✔✔ C. Liability insurance
D. Renters insurance
What is the purpose of an appraisal in a real estate deal?
✔✔ A. To estimate the property’s market value
B. To review the owner’s credit
3
, C. To finalize the sale contract
D. To calculate property tax
Which of the following is a characteristic of a seller’s market?
A. High inventory
B. Falling home prices
✔✔ C. More buyers than available homes
D. Frequent price reductions
What does PMI stand for in real estate?
✔✔ A. Private Mortgage Insurance
B. Property Maintenance Indicator
C. Professional Market Insight
D. Public Mortgage Index
In real estate, what does "under contract" mean?
A. The buyer made a verbal offer
✔✔ B. A purchase agreement has been signed
4
and Answers | Latest Version |
2025/2026 | Correct & Verified
What is the primary advantage of investing in real estate?
A. Guaranteed profits
✔✔ B. Potential for long-term appreciation
C. Immediate liquidity
D. Tax-free income
What does a deductible in an insurance policy represent?
A. The total coverage limit
✔✔ B. The amount paid out-of-pocket before coverage begins
C. The monthly premium
D. The cost to replace damaged items
Which of the following best describes a fixed-rate mortgage?
✔✔ A. A loan with a constant interest rate over the term
B. A loan with payments that decrease each year
1
,C. A loan with adjustable payments every quarter
D. A short-term loan for investors
Which financial metric helps evaluate rental income potential quickly?
✔✔ A. Gross Rent Multiplier
B. Internal Rate of Return
C. Net Present Value
D. Depreciation Expense
Why do lenders often require title insurance during real estate transactions?
A. To protect the real estate agent from losses
✔✔ B. To protect the lender from title disputes
C. To cover structural damage
D. To ensure the seller receives their commission
Which of the following is considered personal property?
A. Land
B. House foundation
2
,✔✔ C. Refrigerator
D. Attached garage
What is one major benefit of owning rental property?
A. Elimination of all taxes
B. No maintenance responsibilities
✔✔ C. Passive income generation
D. Government rent guarantees
Which type of insurance covers injuries to third parties on your property?
A. Dwelling coverage
B. Contents insurance
✔✔ C. Liability insurance
D. Renters insurance
What is the purpose of an appraisal in a real estate deal?
✔✔ A. To estimate the property’s market value
B. To review the owner’s credit
3
, C. To finalize the sale contract
D. To calculate property tax
Which of the following is a characteristic of a seller’s market?
A. High inventory
B. Falling home prices
✔✔ C. More buyers than available homes
D. Frequent price reductions
What does PMI stand for in real estate?
✔✔ A. Private Mortgage Insurance
B. Property Maintenance Indicator
C. Professional Market Insight
D. Public Mortgage Index
In real estate, what does "under contract" mean?
A. The buyer made a verbal offer
✔✔ B. A purchase agreement has been signed
4
