REE 4204 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
What is the market value? - Answer-the average price the market is willing to pay for
that asset
What is financial leverage and why do you care about it? - Answer-positive (favorable)
leverage increases your rate of return
What is a call option? - Answer-the ability to pay off the loan early
What is a put option? - Answer-allows the borrower to put the property in place of the
debt
what is the function of an intermediary? - Answer-its a 3rd party (mortgage lender) that
helps argue a contract
What is an efficient market? - Answer-things being placed efficiently
What kind of market is the real estate market? - Answer-weak form efficiency
Why was there little need for mortgage lending in the colonial US? - Answer-people
used to build their own cabins and they claimed land and homesteaded
Why was financing needed for post-civil war expansion? - Answer-they would sell their
farms to move out west and they needed financing to buy a new farm
What was real estate like in 1920's? - Answer-a lot of real estate was built and financed,
the economy boomed
Why was the 1930's the most memorable period in US history? - Answer-recession, half
of the homes in the US were in default by 1933, property values plummeted
How did the federal government respond to the events that took place in the 1930's? -
Answer-they created government jobs including FHLB,FSLIC, FHA, fannie mae
What kept the US busy in the 1940's? - Answer-WW2; gave people income and
everyone is buying houses and cars and going to school.
When was the modern subdivision created? - Answer-1940's, they were created to
house the GI's and their families
How many people hold a mortgage for the full term? - Answer-very few
US law is a mix of what countries? - Answer-roman, english, german
What is mortgage in french? - Answer-dead gage
COMPLETE SOLUTIONS
What is the market value? - Answer-the average price the market is willing to pay for
that asset
What is financial leverage and why do you care about it? - Answer-positive (favorable)
leverage increases your rate of return
What is a call option? - Answer-the ability to pay off the loan early
What is a put option? - Answer-allows the borrower to put the property in place of the
debt
what is the function of an intermediary? - Answer-its a 3rd party (mortgage lender) that
helps argue a contract
What is an efficient market? - Answer-things being placed efficiently
What kind of market is the real estate market? - Answer-weak form efficiency
Why was there little need for mortgage lending in the colonial US? - Answer-people
used to build their own cabins and they claimed land and homesteaded
Why was financing needed for post-civil war expansion? - Answer-they would sell their
farms to move out west and they needed financing to buy a new farm
What was real estate like in 1920's? - Answer-a lot of real estate was built and financed,
the economy boomed
Why was the 1930's the most memorable period in US history? - Answer-recession, half
of the homes in the US were in default by 1933, property values plummeted
How did the federal government respond to the events that took place in the 1930's? -
Answer-they created government jobs including FHLB,FSLIC, FHA, fannie mae
What kept the US busy in the 1940's? - Answer-WW2; gave people income and
everyone is buying houses and cars and going to school.
When was the modern subdivision created? - Answer-1940's, they were created to
house the GI's and their families
How many people hold a mortgage for the full term? - Answer-very few
US law is a mix of what countries? - Answer-roman, english, german
What is mortgage in french? - Answer-dead gage
