Chapter 17 – Investing in Real Estate and Other Investment Alternatives
78. (p. 576) Federal law requires REITs to:
79. (p. 577) If you want a risk-proof real estate investment, invest in:
80. (p. 571) In what type of real estate investment does the investor hold legal title to the
property?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
81. (p. 575) An example of an indirect real estate investment is:
82. (p. 577) REITs, Ginnie Maes, and Freddie Macs are examples of ____________ real estate
investments.
83. (p. 572) Jane Calvert owns a condominium at the beach which she rents out to vacationers.
What type of investment does she hold?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
84. (p. 575) Owen Cartwright has joined a real estate syndicate that bought an office building in
85. (p. 573) Which of the following is a true statement?
86. (p. 574) Stuart Michelson has invested in several pieces of real estate. Which one of the
properties that Stuart owns would be considered commercial real estate?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
87. (p. 575) Andrea Mitchell has joined a real estate syndicate. The syndicate she belongs to was
formed by one individual who sold participation units to Andrea and several others. The
individual who sold the participation units has unlimited liability and manages the property.
Andrea and the others can only lose their initial investment. What type of real estate syndicate
has Andrea joined?
88. (p. 576) Jefferson Davis has invested in something that acts like a mutual fund and that
invests in properties all over the country. He knows there are federal laws that require this
type of investment to distribute at least 90 percent of the income to shareholders and that
requires there be at least 100 shareholders. What type of investment has Jefferson made?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
89. (p. 576) Harrison Ford has invested in something that acts like a mutual fund and that derives
income from interest on property loans. He knows there are federal laws that require this type
of investment to distribute at least 90 percent of the income to shareholders and that requires
there be at least 100 shareholders. What type of investment has Harrison made?
90. (p. 576) David Harris has invested in something that acts like a mutual fund and that invests
in construction loans and property all over the country. This investment trades on the New
York Stock Exchange. What type of investment has David made?
91. (p. 577) Hal Lindon has an equity investment in a pool of mortgages that have been
purchased by one of several government agencies. What type of investment is this?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
92. (p. 576) Which of the following is a requirement of a REIT?
93. (p. 579) Diane Chambers buys an apartment building for $2 million. Which one of the
following exhibits the highest degree of financial leverage?
94. (p. 577) Real property equity investments are usually considered attractive during times of:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
95. (p. 578) One of the advantages of being a limited partner in a real estate investment venture
is that you have ____________ liability.
96. (p. 578) General partners in a real estate investment venture have ____________ liability.
97. (p. 579) One of the advantages of investing in limited partnerships, REITs, mortgages, or
participation certificates is that you do not need to worry about:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
98. (p. 579) Financial leverage refers to:
99. (p. 578) One of the possible advantages of investing in a real estate limited partnership is that
you:
100. (p. 579) Deflation in commercial real estate began sporadically in the:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
101. (p. 579) Illiquidity in real estate means that:
102. (p. 579) Diversification in direct real estate investments is:
103. (p. 579) Which one of the following real-estate investments provides some diversification?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
104. (p. 580) The tax shelter aspect of a real estate syndicate:
105. (p. 580) Presently you are required to use which method of depreciation in real estate
investments?
106. (p. 580) For residential real estate investments, the depreciation period is ____________
years.
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
107. (p. 580) For all types of real estate investments (EXCEPT residential real estate), the
depreciation period is ____________ years.
108. (p. 580) The investment tax credit has been eliminated entirely for all types of real estate
except:
109. (p. 579) Which of the following is a possible disadvantage of real estate investments?