Chapter 20 Flashcards
the land and buildings that produce rental income
commercial property
real estate investment in which you hold legal title to a property
direct investment
real estate investment in which a trustee is appointed to hold legal title to the property on behalf of an investor group or group of investors
indirect investment
temporary association of individuals or business firms organized to perform a task that requires a large amount of funds
syndicate
an investment in a group of mortgages that have been purchased by a government agency
participation certificate (PC)
the use of borrowed funds for direct investment purposes
financial leverage
include such valuable ores as gold, platinum, and silver
precious metals
rough mineral deposits (usually crystals) that are dug from the earth by miners and then cut and shaped into brilliant jewels
precious gems
rare coins, works of art, antiques, paintings, stamps, rare books, comic books, sports memorabilia, and other items that appeal to collectors and investors
collectibles
responsible
liable
higher than expected
handsome
protection
hedge
rise quickly
soar
______ is using borrowed money so that you can purchase more expensive property.
financial leverage
The owner of a(n) _____ holds the legal title to a purchased property, such as a single-family home or duplex.
direct investments
Many people purchase property in hopes that it will become more desirable and they will be able to sell it for a(n) _____ profit in the future.
handsome
Palladium, rhodium, and silver are examples of _____.
precious metals
When prices rise quickly, they are said to _____.
soar
A(n) _____ is an investment in which a trustee is appointed to hold legal title to a property on behalf of an investor or group of investors.
indirect investments
A temporary association of individuals organized to invest in real estate that requires a large amount of funds is an example of a(n) _____.
sydicates
A general partner takes complete responsibility for a business, but a limited partner is only ____ for the money he or she has invested.
liable
________ are popular with investors thanks in part to ease of storage and durability.
Precious gems
Land and buildings that produce rental income are called _____.
commercial property
A relatively risk-free real estate investment that is considered a mutual fund and can be purchased from federal agencies is a(n) ______.
participation certificate (PC)
Rare coins and works of art are examples of another type of investment, known as ____.
collectables
An example of a direct investment is a…
A. home mortgage
B. Real estate syndicate
C. Real estate investment trust
D. Ginnie Mae certificate
home mortgage
In a syndicate organized as a limited partnership, responsibility for all the partnership’s liabilities belongs to the…
A. Limited partners
B. General partner
C. Tenants
D. Federal government
general partner
An investment in a real estate syndicate can be…
A. Depreciable
B. Deductible
C. Tax-exempt
D. Diversified
diversified
REIs might invest the participants money in any of the following items except…
A. Construction loans
B. Financial instruments
C. Properties
D. Mortgages
Financial instruments
Which of the following are examples of participation certificates?
A. Maes and Macs
B. U.S. Treasury Bills
C. REITs
D. Real estate syndicates
Maes and Macs
Generally, an indirect investment in real estate is…
A. easily converted into cash
B. a hedge against inflation
C. only for the wealthy
D. A good tax shelter
a hedge against inflation
The price of gold might fall when…
A. War threatens
B. the government seems unstable
C. Countries make peace
D. Inflation soars
countries make peace
In January 2005, which of the following precious metals was most valuable?
A. Gold
B. Platinum
C. Palladium
D. Rhodium
Rhodium
A gem’s certificate should list each of the following characteristics except…
A. Weight
B. Color
C. Density
D. Clarity
Density
Drawbacks of finding collectibles on the internet include the…
A. Inability to comparison shop
B. Lack of a wide range of sellers
C. Inability to examine items for flaws
D. Frequently charged buyers commissions
Inability to examine items for flaws
