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

A) True
B) False

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What advantages do real estate investments offer?

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Real estate investments may ha...

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An advantage of purchasing diamonds for investors is that:


A) diamonds are not easily turned into cash.
B) diamonds are small and easy to conceal.
C) diamonds are largely controlled by DeBeers Consolidated Mines of South Africa.
D) the grading of diamonds is not an exact science.
E) diamonds are typically bought at retail and sold at wholesale.

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

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Which of the following is a true statement?


A) Rental property expenses do not include mortgage interest.
B) Many investors acquire large rental properties initially and then trade down to smaller units.
C) Rental property expenses are not limited for tax purposes.
D) Rental property expenses are treated as a passive loss once they exceed rental income.
E) A passive activity is a business you materially participate in.

F) A) and B)
G) B) and E)

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Which of the following is an investment where a trustee holds legal title to the investment?


A) Commercial property
B) Undeveloped land
C) Office buildings
D) Duplexes
E) Syndicates

F) A) and E)
G) A) and D)

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

A) True
B) False

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On larger gold bars,dealers and banks add a ____________ percent premium over the pure gold bullion value.


A) 1 to 2
B) 3 to 5
C) 5 to 8
D) 6 to 7
E) 9 to 12

F) A) and E)
G) A) and D)

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Today,real estate investors must use accelerated depreciation methods to recover the costs.

A) True
B) False

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A participation certificate is an equity investment in a pool of mortgages or student loans that have been purchased by one of several government agencies.

A) True
B) False

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Which one of the following is not required of a REIT by federal law?


A) Distribute at least 90 percent of the taxable annual earnings to shareholders
B) Hire independent real estate professionals to perform certain management activities
C) Have at least 100 shareholders with no more than half of all shares owned by 5 or fewer people
D) Make direct investments only in apartment houses, shopping malls, and other commercial property
E) Invest at least 75 percent of the total assets in real estate

F) A) and B)
G) B) and D)

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Harrison Ford has invested in something that acts like a mutual fund and that derives income from interest on loans to real estate owners.He knows there are federal laws that require this type of investment to refrain from engaging in speculative,short-term holding of real estate to sell for quick profits.What type of investment has Harrison made?


A) Limited partnership
B) Equity REIT
C) Mortgage REIT
D) Hybrid REIT
E) Participation certificate

F) None of the above
G) A) and E)

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

A) True
B) False

Correct Answer

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

A) True
B) False

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The basic unit of gold bullion is one _____ of 0.995 fine gold.


A) kilogram.
B) troy ounce.
C) pound.
D) ton.
E) wafer.

F) A) and E)
G) C) and D)

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A REIT is a firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.

A) True
B) False

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Real Estate Investment Trusts must distribute at least 90 percent of their taxable annual earnings to shareholders.

A) True
B) False

Correct Answer

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Over the past 30 years,the median price of existing homes has increased an average of more than _____ percent every year.


A) 5
B) 6
C) 7
D) 10
E) 11

F) A) and B)
G) A) and C)

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A passive activity is a business or trade in which you do not materially participate.

A) True
B) False

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Most REITs specialize in one property type only.

A) True
B) False

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The basic unit of gold bullion is one troy ounce.

A) True
B) False

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Showing 121 - 140 of 151

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