Printable Lesson Materials

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1 Printable Lesson Materials Print these materials as a study guide These printable materials allow you to study away from your computer, which many students find beneficial. These materials consist of two parts: graphic summaries of the content and a multiple choice quiz. Graphic Summaries This portion of your printable materials consists of dozens of frames that summarize the content in this lesson. The frames are arranged on the page to make it easy for you to study the material and add your own notes from your textbook or the online course. Quizzes Many students learn best from sets of questions, and this multiple choice quiz allows you to focus your review of the material to important topics Rockwell Institute NE 20th Street Bellevue, WA

2 Real Estate Finance Lesson 1 Cumulative Quiz 1. The face amount of a bond is the: A. interest rate paid on the bond B. total interest paid over the bond's term C. bond's value when pooled with other bonds D. value of the bond at maturity 2. Which of the following are debt investments? A. Securities B. Stocks C. Real estate D. Bonds 3. An investor who is interested in the amount of money an investment will produce is primarily concerned about the investment's: A. safety B. yield C. liquidity D. diversity 4. One way an investor can minimize the likelihood of suffering serious losses on her investments is to: A. maintain a diversified portfolio B. focus on investments with a high rate of return C. invest in only one type of asset D. All of the above 5. Generally, the longer the loan term: A. the lower the risk of loss B. the higher the risk of loss C. the lower the interest rate risk D. the higher the interest rate risk 6. A lender receives a return on a mortgage loan in the form of: A. interest B. appreciation C. a discount rate D. dividends 2009 Rockwell Publishing 1

3 7. Gina bought her house 5 years ago for $250,000. She's decided to move to the country, so she puts the house up for sale. Todd buys it for $375,000. Gina's profit on the sale is the result of: A. liquidity B. diversification C. appreciation D. principal 8. Which of these types of investments has the slowest rate of capital turnover? A. Bonds B. Mutual funds C. Real estate D. Stocks 9. Jenny has saved up $4,000 over the past year, and she'd like to invest the money. She's uncertain about the stability of her job, however, and she wants quick access to her money in the event that she's laid off. Jenny is primarily concerned about: A. safety B. rate of return C. liquidity D. appreciation 10. To protect the yields they expect from their loans, mortgage lenders sometimes charge a penalty for: A. prepayment B. foreclosure C. increased interest rates D. None of the above 11. The original principal amount of a mortgage loan is the: A. lender's yield B. lender's return on the investment C. amount of the lender's investment D. appreciation of the asset 12. Someone who buys an asset or a property interest in an asset is making a/an: A. security investment B. debt investment C. diversified investment D. ownership investment 2009 Rockwell Publishing 2

4 13. Mortgage loans are pooled together and sold on the secondary market as: A. package loans B. mutual funds C. bond groups D. mortgage-backed securities 14. Which of the following is NOT true of market interest rates? A. High market interest rates encourage refinancing B. High market interest rates dampen the real estate market C. Low market interest rates can stimulate home sales D. Low market interest rates encourage refinancing 15. Stocks and bonds are traded in specialized markets that are regulated by the: A. Federal Deposit Insurance Corporation B. Equal Credit Opportunity Commission C. Securities and Exchange Commission D. Federal Reserve System 16. Mortgage lenders screen loan applicants to evaluate the: A. risk of default B. risk of loss C. interest rate risk D. All of the above 17. A mortgage lender's risk of loss relates to: A. the likelihood that the borrower will default on the loan B. the probability that interest rates will decrease during the loan term C. the possibility that the proceeds from a foreclosure sale of the property wouldn't cover the loan balance D. None of the above 18. An investor invests money in expectation of a return on the investment. Depending on the type of investment, the return may be any of the following, except: A. rental income B. interest C. depreciation D. appreciation 2009 Rockwell Publishing 3

5 19. A certificate of indebtedness issued by a governmental body or a corporation is a: A. bond B. mutual fund C. stock D. certificate of deposit 20. Which of the following statements about securities is true? A. Securities give the holder a property interest or a right to payment. B. The holder of a security has managerial control over the underlying enterprise. C. Savings accounts are securities. D. Securities are not easily bought or sold Rockwell Publishing 4