Chapter 10

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

The FDIC insures deposits up to $______________. -25,000 -10,000 -100,000 -250,000

250,000

True or False? Stocks are considered a good investment because the return OF your investment is guaranteed.

False

Which of these entities needs to invest money as a fundamental part of their operations? -government -insurance companies -pension funds -all of these

all of these

"A tangible or intangible benefit of real property that enhances its attractiveness or increases the satisfaction of the user" is the definition of -return on investment -amenity -cost -pleasantry

amenity

The return ON investment is usually accomplished through -net worth -refinancing -resale -interest payments

interest payments

The "price" of money is expressed as -loan term -appreciation -interest rate -rate of return

interest rate

Which of the following is NOT a commodity? -gold -real estate -money -market area

market area

"The Federal Reserve's efforts to influence the level of economic activity by regulating the availability of money and the rate of interest" is the definition of -money policy -monetary policy -protectionism -arbitrage

monetary policy

Where are short-term money instruments bought and sold? -money market -capital market -stock market -housing market

money market

The rate that banks employ when lending money to their highest rated customers is called the __________ rate. -preferred -prime -super -insider

prime

The capital market deals in all of the following EXCEPT -real estate -mortgages -bonds -stocks

real estate

Which investment alternative has the least liquidity? -savings account -money market -certificate of deposit -real estate

real estate

Which of the following typically generates the highest return on investment? -savings account -money market -certificate of deposit -real estate

real estate

Which of the following typically incurs the highest burden of management? -savings account -money market -certificate of deposit -real estate

real estate

The Fed consists of ______ regional banks. -4 -7 -12 -50

12

When was the Fed founded? -1913 -1939 -1943 -1961

1913

As part of its monetary policy, the Fed can influence both the _______ of money and the _______ of money. -supply, cost -demand, availability -thickness, color -supply, demand

supply, cost

The supply of money in the U.S. is regulated by -Congress -the Treasury Department -the Fed -the President

the Fed

Who appoints members to the Federal Reserve Board? -they are elected by public vote -the Secretary of the Treasury -the FRB chairperson -the President of the U.S.

the Presdident of the U.S.

Which is NOT a short-term money instrument? -one year Treasury bill -one year Treasury Note -7 year CD -5 year balloon mortgage

5 year balloon mortgage

The Federal Reserve Board consists of ____ members. -4 -5 -7 -15

7

To whom is the Fed accountable? -Congress -No one -The President -The Treasury Department

Congress

Which statement is most TRUE about investors purchasing real property? -They are not concerned about the bottom line; if the property has an attractive appearance they will purchase it. -They make their purchase decisions emotionally, and without logic. -They are less concerned with amenities and more concerned with income and expenses. -They tend to be focused on amenities.

They are less concerned with amenities and more concerned with income and expenses.

True or False? Money is a commodity that is bought and sold on the market.

True

True or False? The burden of managing the investment is one of the reasons why real property investors typically demand higher yields.

True

The "price" of money is -its yield -an interest rate -change -its discount rate

an interest rate

"The interaction of buyers and sellers trading long- or intermediate-term money instruments" is the definition of the _____________ market. -money -short-term money market -capital -federal

capital

The interest rate that is charged by the Fed when lending money to banks is called the _______ rate. -bank -discount -prime -bank-to-bank

discount

Amenities such as a nice view are generally more important to -investors -tenants -homeowners -landlords

homeowners

You are an investor who owns a parcel of real property. You want to cash out your investment, and it takes you a year to market your property and close the sale. What investment factor does this demonstrate? -favorable tax treatment -safety -liquidity -easement

liquidity

Which type of purchaser is more likely to pay more attention to the amenities of a property, such as a pool, a horse stable, or a nice view? -owner-occupant buyer -investor -both an owner-occupant and an investor -would look at a property exactly the same

owner-occupant buyer

Which of the following typically generates the lowest return on investment? -savings account -money market -certificate of deposit -real estate

savings account

Money market is defined as the interaction of buyers and sellers who trade -long term money instruments -stocks and bonds -mortgages -short-term money instruments

short-term money instruments

How are members of the Board of Governors of the Federal Reserve System selected? -they are appointed by the President and confirmed by the Senate -they are nominated by outgoing members of the Board of Governors -they are appointed by the Secretary of the Treasury -they are elected by voters in Washington DC

they are appointed by the President and confirmed by the Senate

How do investors typically compensate for higher risk in an investment? -they pay more for the property -they seek a lower rate of return -they do nothing; because they are not concerned with risk -they demand a higher return

they demand a higher return


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