Chapter 17 – Investing in Real Estate and Other Investment Alternatives
110. (p. 580) Which of the following can be a management problem when investing directly in
real estate?
111. (p. 581) During which of the following economic periods is the price of a precious metal,
such as gold, silver or platinum, likely to increase?
112. (p. 581) Investors buy precious metals as a hedge against:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
113. (p. 581) Easing of international tensions or disinflation cause gold prices to:
114. (p. 581) Increasing interest rates in the economy cause gold prices to:
115. (p. 581) In general, the price of gold:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
116. (p. 581) The basic unit of gold bullion is one:
117. (p. 581) On small gold bars, dealers and banks add a ____________ percent premium over
the pure gold bullion value.
118. (p. 581) You can avoid assaying problems by investing in:
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
119. (p. 581-582) Jeremy Fischer has just purchased 20 American eagle gold coins from a broker.
What type of investment does he hold?
120. (p. 583-584) Brian Wilson has several baseball cards passed down to him from his
grandfather. He is particularly proud of the signed Hank Aaron baseball card that he has.
What type of investment does he hold?
121. (p. 583) Lynn Roy owns three, two-carat diamonds that she received from her grandmother
who did not believe in banks or stocks and bonds. What type of investment does she hold?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
122. (p. 581) If a gold bullion bar does not remain in the possession of the dealer or bank that
sells it, what must happen before it can be resold?
123. (p. 583-584) It is much easier today to find and trade in collectibles than it was in prior years.
Which one of the following is primarily the reason for this?
124. (p. 572) A vacation home is deemed a second home so long as you rent it no more than
________ per year.
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
125. (p. 580) What is the annual depreciation for tax purposes on residential real estate
purchased at a cost of $200,000?
126. (p. 578) Austin has invested $25,000 as one of 10 limited partners in a large shopping
center that was purchased for $800,000. The shopping center has been unsuccessful and the
four general partners fear that the property could be foreclosed upon soon. What is the most
Austin might lose if the project fails?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
127. (p. 583) An advantage of purchasing diamonds for investment purposes is that:
128. (p. 579-580) What role can a REIT play in diversifying an individual’s investment portfolio?
129. (p. 575) Explain the relationship between syndicates and REITs.
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
130. (p. 571) Explain the difference between direct and indirect investments in real estate. Give
examples of each.
131. (p. 577-579) What advantages do real estate investments offer?
132. (p. 579-580) What are some possible disadvantages of real estate investments?
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
133. (p. 580-584) What are the risks and rewards of investing in precious metals, gems, and
collectibles?
134. (p. 581) Explain why gold prices tend to rise when influenced by such factors as fear of
war, political instability, and inflation.
Chapter 17 – Investing in Real Estate and Other Investment Alternatives
135. (p. 572-574) Your parents own a vacation home and find it more difficult to spend as much
time there as they once did. They are thinking about continuing to use it as a vacation retreat
but also want to periodically rent it and use it as an investment. Discuss the issues they should
consider when making this decision.