MGMT 180 Midterm Exam FALL 2025 University of California

2/8/2016 Midterm Exam

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Started on Monday, February 8, 2016, 12:30 PM

State Finished

Completed on Monday, February 8, 2016, 1:45 PM

Time taken 1 hour 14 mins


Question1 Complete d. 6.0%
Points out of 1.00

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question The debt in connection with a real property financing is evidenced by:

Select one:

a. A mortgage
b. A deed of trust
c. A security interest
Question2 Complete d. A promissory note
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question If a commercial property’s first year annual net operating income is
projected to be $180,000, the property’s acquisition cap. rate is 6.0%, and
the lender’s maximum LTV is 60% of the purchase price, what is the
maximum loan amount that can be borrowed against the property?

Select one:
Question3 Complete a. $3,000,000
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b. $4,000,000
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c. $1,800,000
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d. $2,250,000



An investor is considering a residential investment property acquisition at a
price of $4,000,000 with the following annualized financial information:


Question4 Complete Gross rental and other income ………. $ 460,000
Points out of 1.00 Operating Expenses …………………. $ 180,000
Flag Depreciable Tax Basis ………………. $2,750,000
question
An adjustable rate mortgage with a start rate of 1.0%, an index of the 11th Assumable interest-only mortgage ….. $3,000,000 at 4% per year
District COFI, a margin of 2.5%, and periodic and lifetime caps of 1/6 with
semi-annual adjustments, would have a maximum interest rate of what at
the beginning of the third loan year if the 11th District COFI is then 7.0%? What is the acquisition cap. rate?

Select one: Select one:

a. 7.0% a. 7.0%

b. 9.5% b. 11.5%

c. 5.0% c. 3.2%

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Question5 Complete

, Remove flag Operating Expenses …………………. $ 180,000

Depreciable Tax Basis ………………. $2,750,000

Assumable interest-only mortgage ….. $3,000,000 at 4% per year


What is the property’s taxable income?

Select one:
a. $180,000
b. $280,000
c. $160,000
d. $60,000



Negative financial leverage occurs when:
Question6 Complete
Select one:
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a. An investor borrows at maximum loan to value ratios
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b. An investor borrows non-recourse
c. An investor borrows interest-only and thereby avoids amortization
payments
d. An investor borrows at an interest rate above the property’s
unleveraged IRR
Question7 Complete
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The primary method used to appraise the value of a house is the:
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question
Select one:
a. Comparable sales
b. Replacement cost approach
c. Gross rent multiplier
Question8 Complete d. Capitalization of income
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question What is the APR on a 30 year fully amortizing fixed rate loan in the amount
of $5,000,000 if the stated annual interest rate is 3.5% and the lender
charges 1 point as an origination fee, $54 for a credit report and $1800 for
an appraisal?

Select one:

a. 3.58%
Question9 Complete
Points out of 1.00 b. 3.68%
c. 3.50%
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d. 3.42%
d. 4.5%


If a senior homeowner wants to put a reverse annuity mortgage (RAM) on
An investor is considering a residential investment property acquisition at a her property that currently appraises for $1,500,000 so that she will receive
price of $4,000,000 with the following annualized financial information: a monthly payment from the lender of $3,600 for the rest of her life, and if
her lender’s RAM program charges 5.5% annual interest compounded
monthly, what will be the loan balance when the borrower dies after 18
Gross rental and other income ………. $ 460,000 years if the maximum loan amount is capped at the current appraised value?



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question Question10 Complete
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