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This Chapter Quiz includes 15 multiple-choice questions. You must answer 10 out of 15 questions correctly (70%) in order to pass.

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1. What is the purchase price of a property with an NOI of $460,000 and a capitalization rate of 6%?

2. Net operating income does NOT take into account which of the following?

3. Is real estate a liquid asset?

4. The capitalization rate is equal to the net operating income divided by the...?

5. Which of the following asset classes is considered the best?

6. An investor's down payment on a property is equal to their initial ........... in the property.

7. The top line in the income section of a pro-forma lists which of the following?

8. Why do investors specifically like to buy real estate?

9. An investor is looking to purchase a property for $3,000,000. If the investor is purchasing at a 5% cap rate, what is the NOI of the property?

10. If an investor purchased a property for $2,000,000 using all cash, what would be their return on investment in year one if the property yielded $260,000 in cash flow?

11. Which of the following property types are valued using a capitalization rate?

12. An investor is looking to purchase a property for $2,500,000. If the property has an NOI of $150,000, what is the going cap rate?

13. What defines how much risk a property presents?

14. If a unit is not being rented, it should be classified as a/an...?

15. The value of a commercial property is primarily based on which of the following?