Real Estate Quiz 7

Question 1

A mortgage which encumbers both real and personal property is a (an):
Select one:
a. Package mortgage 
b. Blanket mortgage 
c. Open-end mortgage 
d. Adjustable mortgage

Answer 1

Package mortgage

Question 2

The sales-comparison approach:
Select one:
a. Is based upon the principle of substitution
b. Reflects the market behavior of a typical buyer
c. Can be used only in an active market when reliable market sales data is available
d. All of the above

Answer 2

All of the above

Question 3

What is the formula to calculate a property’s Equity Dividend Rate?
Select one:
a. Net Operating Income divided by Debt Service
b. Net Operating Income divided by Value
c. Operating Expenses divided by Effective Gross Income
d. Before-Tax Cash Flow divided by the Down Payment (Equity)

Answer 3

Before-Tax Cash Flow divided by the Down Payment (Equity)

Question 4

What will happen if a Florida real estate licensee fails to timely complete the post license education requirement?
Select one:
a. Cancellation 
b. Null and void 
c. Automatic suspension 
d. Involuntary inactive

Answer 4

Null and void

Question 5

The amount of capitalization rate a property will generate is determined by using the formula of:
Select one:
a. Dividing the net operating income by the market price.
b. Multiplying the potential gross income by the effective gross income.
c. Dividing the effective gross rate by the gross income.
d. Subtracting the effective gross income from the gross income.

Answer 5

Dividing the net operating income by the market price.

Question 6

Which of the following are not eligible to make a claim from the recovery fund?
Select one:
a. A person who has received a judgment for more than $50,000 because of the actions of a licensee
b. When the claim is against a licensee whose license was ineffective when the transaction occurred
c. When the claim is against a licensee whose license was ineffective at the time the claim was made
d. When the claim does not involve fraud

Answer 6

When the claim is against a licensee whose license was ineffective when the transaction occurred

Question 7

Associate Terri sold a home and was expecting to share the commission with her broker, Tim. After receiving the commission check at closing, Tim had an unexpected bill from the IRS and used the entire commission for that purpose. Which of the following statements best describes this situation?
Select one:
a. The commission belongs to the broker and he is not required to pay associates under unusual circumstances
b. Tim may be guilty of failure to account and deliver
c. Terri may sue Tim and the seller for her share of the commission
d. Terri can request that her share of the commission be collected from the Real Estate Recovery Fund

Answer 7

Tim may be guilty of failure to account and deliver

Question 8

Which of the following is a government-sponsored, privately-owned corporation that participates in the secondary mortgage market?
Select one:
a. FNMA 
b. GNMA 
c. FDIC 
d. HUD 
Feedback

Answer 8

The correct answer is: FNMA

Question 9

Redistribution of the decision making process downward to subordinates is called:
Select one:
a. Vertical integration 
b. Decentralization 
c. Staff implementation 
d. Pyramiding 
Feedback
The correct answer is: Decentralization

Answer 9

The correct answer is: Decentralization

Question 10

Agency relationships can be terminated in all of the following ways except:
Select one:
a. Agent resignation 
b. Bankruptcy of the agent 
c. Mutual agreement 
d. Death of principal or agent 
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Answer 10

The correct answer is: Bankruptcy of the agent