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Exam 17: Investing in Real Estate and Other Investment Alternatives

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Question 51

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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?

A) $80,000
B) $57,143
C) $200,000
D) $25,000
E) $20,000

F) A) and B)
G) All of the above

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Question 52

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Explain the difference between direct and indirect investments in real estate.Give examples of each.

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Real estate investments are classified a...

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Question 53

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Deflation in commercial real estate began sporadically in the:

People generally buy a vacation home for tax reasons.

Perhaps the largest drawback of direct real estate investments is the absence of large,liquid,and relatively efficient markets for them.

Unlike stocks and bonds,precious metals sitting in vaults earn no income.

High interest rates depress gold prices because they make it very expensive to carry gold as an investment.

Harrison Ford has invested in something that acts like a mutual fund and that invests in construction loans 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 Harrison made?

For all types of real estate investments (EXCEPT residential real estate) ,the depreciation period is ____________ years.

In what type of real estate investment does the investor hold legal title to the property?

Housing will continue to be a not-so-liquid investment that promises steady returns over time.

Stuart Michelson has invested in several pieces of real estate.Which one of the properties that Stuart owns would be considered commercial real estate?

Easing of international tensions or disinflation causes a decline in gold prices.

General partners in a real estate limited partnership bear unlimited liability.

During deflationary or recessionary periods,the values of real estate investments generally increase.

There are three types of REITs: equity REITs,mortgage REITs,and hybrid REITs.

The tax laws prevent real estate investors from taking losses in excess of the actual amounts they invest.

Jeremy Fischer has just purchased 20 American eagle gold coins from a broker. What type of investment does he hold?

The basic unit of gold bullion is one:

Gold prices are subject to daily price fluctuations.