Chapter 3

An agent reads the financial papers and notices a trend of small discount rates increasing over the past nine months. When he checks the price of Treasury bonds, he sees prices falling and interest yielding, which suggests that rising rates in the market may be noticeable soon. What might he conclude?

He might conclude that now is the time to start listing storage units.

If the Fed sees an increase in the costs of goods and services due to an inflationary trend it may take which of the following actions?

Increase the discount rate and sell government securities

Market research is a more formal way of identifying large segments of the market that have similar commonalities. The large segments are referred to as

a target market.

Research has shown that buyers

are often like the people already living in the neighborhood.

An overheated economy occurs when the

supply of goods and services cannot keep up with the demand.

An agent that specializes in small 2.5 to 5 acre parcels in a rural area might define the owners of those properties as her

target market.

The Federal Reserve regulates the banking system in several different ways. All of the following are incorrectly stated about the tools the Fed uses, EXCEPT

the Fed can control the money supply through the purchase or sale of government securities.

To decrease the money supply,

the Fed offers investors a rate of return on government securities that is often higher than alternative cash investments.

The features in homes or the services agents provide don't change much over time. However, agents are aware

the benefits sought by customers do change over time.

All the following statements regarding finding and collecting data for a research project are false EXCEPT

the data must be relevant to solving the problem.

Banks must balance their books at the end of each day. If they are out of balance, they must borrow money overnight to make sure their books balance. If they cannot borrow from another thrift, their last recourse is to borrow from the Fed. The name of the rate charged is

the discount rate.

When banks borrow from one another they are charged

the federal funds rate.

Suppose you deposit $1,000 in your bank. However, the bank can only loan out $720 due to

the reserve requirements established by the Federal Reserve.

An advertisement that features a home with windows low to the ground, lower countertops and lower peepholes in the front door is one that is

trying to attract a specific target market.

If the Federal Reserve wants to nudge an economy out of recession, it may attempt to expand the money supply by buying back government securities, such as Treasury bills, bonds, and notes. It does this through its -Effectively prioritizing tasks -The establishment of short-term and long-term goals -Market research, when combined with data analysis and drawing conclusions -All of these

All of these

Which of the following is a result of research?

All of these

Which of the following provides us a purpose for a marketing research project? -How do I take advantage of my competitors' weakness? -What are the demographics of the market place and how do I use that information? -What services are demanded by the target market? -All of these

All of these

Which statement regarding referrals is usually TRUE?

All of these are true.

Which of the following is a channel of distribution?

An air balloon that flashes an LED lighted message at dusk each night

Which of the following reorganizes information so that conclusions may be drawn?

Analysis

Which of the following describes open market operations?

The purchase or sale of government securities

Market research is a data-gathering process that eventually leads to making marketing decisions. Which of the following steps in market research definitively states a course of action?

Conclusions

Which of the following helps agents determine the demographic makeup of its target market, list properties appropriate for the demographic group, and demonstrate the benefits the market desires?

Customer analysis

Which step in market research is devoid of judging loosely organized information?

Data gathering

Which of the following is NOT an activity conducted by the Federal Reserve?

Decreasing taxes

Which of the following agencies help the Fed manage the nation's money supply?

FOMC

If prices are rising for the components of a house, the Federal Reserve might conclude that shortages will cause inflation if demand stays constant or increases. What can the Fed do to slow this eventuality?

Influence thrifts to increase their interest rates to slow spending

Which of the following tools used by the Fed has more to do with the stock market and isn't changed that frequently?

Margin requirements

Which of the following has a reputation of being very expensive?

Market research

Which of the following is TRUE?

Multifamily units tend to appreciate in value when interest rates are high.

Which of the following helps describe channels of distribution?

Newspapers, magazines, and television stations

Which of the following BEST describes secondary data?

Originally collected by another party for their use, and not the agents' use

The Fed may take actions to increase the money supply in the United States. If these actions get out of hand, an excess supply of dollars is created worldwide. This will create which of the following results?

Our domestic real estate values will appear inexpensive to foreign investors.

Which of the following committees can agents monitor when trying to anticipate the direction of consumer interest rates?

The Federal Open Market Committee

Which statement regarding finding and collecting data for a research project is TRUE?

The data must be relevant to solving the problem.

Which statement explains why research is an integral part of any marketing plan?

There is nothing easier than selling people what they want.

Why do agents select the largest segments of the target market?

These segments are the easiest to find and attract.

Which of the following is TRUE?

Whatever the Fed decides to do, consumers must be willing to increase or decrease their spending for any of the Federal Reserve tools to work.

A mail survey is an example of

a method used to gather data.

An agent works with a title company and pulls together the market values, loan amounts, and names and addresses of property owners within a neighborhood. The agent infers the income level of the neighborhood by estimating the average principle and interest payment and dividing it by 35% (a conservative debt to income ratio). The agent follows this up with door to door surveys, which helps him get an idea of the age range and family demographics of those in the neighborhood. This is an example of

data gathering.

When based on the data gathered during market research, a customer analysis

gives agents the tools to attract the target market.

When money is tight,

interest rates have increased.

If the Federal Reserve wants to nudge an economy out of recession, it may attempt to expand the money supply by buying back government securities, such as Treasury bills, bonds, and notes. It does this through its

involves the discovery of the strengths and weaknesses of your own firm as well as the discovery of the strengths and weaknesses of your competition.

None of the following can help agents make marketing decisions that reduce risk, save time, and save money EXCEPT

market research.

All the following statements regarding referrals are usually true EXCEPT

more often than not, the referrals are from out of the area.

If the Federal Reserve wants to nudge an economy out of recession, it may attempt to expand the money supply by buying back government securities, such as Treasury bills, bonds, and notes. It does this through its

open market operations.

Suppose an individual is given a choice between two investments. At the present time the individual is earning 3% in a cash account and has the security of FDIC protecting that account. In one investment they may be able to yield a 5% return, although it involves some risk. The other investment is a 4% government bond, which had a recent yield increase due to

open market operations.

When agents gather data from closed listings or mail surveys, it is called

primary data collection.

When agents review closed transactions and cross-check every buyer's former address to the geographic location of the properties purchased and discover that people from one geographic area tend to purchase in a similar price range or neighborhood, this is an example of

primary data collection.

The type of research data agents collect is unlimited, but should

relate to the question an agent is trying to answer.

A process known as fractional reserves provides the Fed a unique way of expanding or contracting the money supply. For every dollar that enters the banking system, a certain percentage is unavailable for loans. By increasing or decreasing this percentage, the Fed has some control over the amount of money that is in the market place. Of the three major tools used by the Federal Reserve, this one is also called the use of the

reserve requirements.

For every dollar that enters the banking system, a certain percentage is unavailable for transactions. This tool, used by the Federal Reserve to control the money supply, is called

reserve requirements.

An agent experiences greater results by going to the county assessor's office and researching recent sales of properties in specific areas. By doing so, she learns who is buying, selling, and accumulating property. She also learns what size properties are selling the most and if there is any commonality with regard to where the buyers live. This is an example of

secondary data collection.

Chamber of commerce studies and marketing journals are examples of

secondary data.

Data gathered from title companies, such as ownership records, comparable sales data, and maps are regarded as

secondary data.

The source of information doesn't really matter to agents. However, data that is available to the public in one form or another and is generally free is known as

secondary data.

Utility companies, the almanac, consumer reports, title companies, voter registration, churches, colleges, libraries, and the multiple listing service are all sources of

secondary data.