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Exam 17: Investing in Real Estate and Other Investment Alternatives

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Question 51

Multiple Choice

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Which one of the following real estate investments provides various levels of diversification?

A) REITs
B) Ginnie Maes
C) Freddie Macs
D) Other syndicates
E) All of these

F) B) and E)
G) A) and B)

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Question 52

Multiple Choice

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An advantage of purchasing diamonds for investors is that:

A) diamonds are not easily turned into cash.
B) diamonds are small and easy to conceal.
C) diamonds are largely controlled by DeBeers Consolidated Mines of South Africa.
D) the grading of diamonds is not an exact science.
E) diamonds are typically bought at retail and sold at wholesale.

F) D) and E)
G) A) and D)

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Question 53

Multiple Choice

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Which of the following is a true statement regarding commercial property?

Most REITs specialize in one property type only,such as shopping malls,timberlands,or self-storage facilities.

Presently,you are required to use which method of depreciation in real estate investments?

A vacation home is deemed a second home so long as you rent it for no more than ________ per year.

During deflationary or recessionary periods,the values of real estate investments generally increase.

Which of the following is not a reason that precious stones like diamonds appeal to investors?

In 2016,which country was the world's largest producer of gold?

Gross profit on a real estate transaction equals the selling price minus the purchase price.

What advantages do real estate investments offer?

A real estate syndicate provides professional management and unlimited liability for its members.

The limited partnership is formed by a limited partner,who has unlimited liability for its debts.

Commercial property refers to land and buildings that produce lease or rental income.

The tax laws prevent real estate investors from taking losses in excess of the actual amounts they invest.

Over the past 30 years,the median price of existing homes has increased an average of more than ________ percent every year.

On larger gold bars,dealers and banks add a ________ percent premium over the pure gold bullion value.

Andrea Mitchell has joined a real estate syndicate.The syndicate she belongs to was formed by one individual who sold participation units to Andrea and several others.The individual who sold the participation units has unlimited liability and manages the property.Andrea and the others can only lose their initial investment.What type of real estate syndicate has Andrea joined?

Financial leverage is the use of borrowed funds for investment purposes.

The first gold bullion coin ever produced by the U.S.government was issued in 2001.