Unit 2

Question 1

One business cycle consists of expansion, recession, contraction, and revival.
True
False

Answer 1

True

Question 2

Long-term business cycles occur regularly once a year.
True
False

Answer 2

False

Question 3

The management plan considers the surrounding area, the subject property, and the owner’s goals.
True
False

Answer 3

True

Question 3

Hurricanes and terrorist attacks are considered part of long-term movements.
True
False

Answer 3

False

Question 4

Real estate is not generally influenced by outside market forces.
True
False

Answer 4

False

Question 5

When taking over a new property, the manager should begin by read­ing all the existing leases.
True
False

Answer 5

True

Question 6

The outward appearance of the building is often referred to as “curb appeal.”
True
False

Answer 6

True

Question 7

Owners of rental properties usually have similar goals and interests.
True
False

Answer 7

False

Question 7

An optimum rent may have to be adjusted to reflect the advantages and disadvantages of the subject property.
True
False

Answer 7

True

Question 8

The amount of money that is available for use after paying expenses and the debt service is called reserve funds.
True
False

Answer 8

False

Question 9

Which of the following BEST describes a market?

a. Expansion and contraction phases
b. Seasonal variations
c. Cyclic and random changes
d. Exchange of goods between buyers and sellers

Answer 9

d. Exchange of goods between buyers and sellers

Question 10

The four phases of the business cycle are:

a. inflation, expansion, growth, contraction.
b. expansion, growth, contraction, revival.
c. expansion, recession, contraction, revival.
d. contraction, growth, revival, contraction.

Answer 10

c. expansion, recession, contraction, revival.

Question 11

Which of the following would be one of the more indirect government actions to influence the economy?

a. Government decreasing taxes
b. Downturn in general business economy
c. Closure of defense facilities
d. Major plant closing

Answer 11

c. Closure of defense facilities

Question 12

How do long-term movements in the real estate industry compare to those in the general economy?

a. Generally the opposite
b. Often the same
c. Longer than those in the general economy
d. Generally shorter than those in the general economy

Answer 12

d. Generally shorter than those in the general economy

Question 13

The residential rental market corresponds roughly to

a. cycles in multifamily housing starts.
b. commercial properties.
c. industrial property.
d. construction of new shopping centers.

Answer 13

a. cycles in multifamily housing starts.

Question 13

The financial and operational strategy for the ongoing management of a property is the

a. property manager.
b. evaluation of all properties in the area.
c. management plan.
d. five-year forecast.

Answer 13

c. management plan.

Question 14

After completing the regional and neighborhood market surveys, the residential property manager will focus on

a. the availability of raw materials and the potential workforce in the area.
b. opportunities for expansion and transportation facilities
c. traffic counts and parking spaces.
d. size of family units and the median income level.

Answer 14

d. size of family units and the median income level.

Question 15

If a property manager wants to find out if occupancy levels for a given type of property are rising or falling, the property manager should

a. call the local chamber of commerce.
b. survey comparable properties.
c. check with the census bureau.
d. consult the Consumer Price Index (CPI).

Answer 15

b. survey comparable properties.

Question 16

Having more available units than tenants indicates:

a. occupancy trends.
b. curb appeal.
c. economic oversupply.
d. technical oversupply.

Answer 16

d. technical oversupply.

Question 17

Which of the following is the first step in the management plan?
a. Prepare five-year forecast
b. Prepare an operating budget
c. Establish optimum rents
d. Predict anticipated revenue

Answer 17

b. Prepare an operating budget