Real Estate Finance

A standardized measure for interest rates and other costs of the loan is called _______.

Annual percentage rate

How does the consumer provide economic support to a community in the living phase of the real estate cycle? A. By paying income taxes B. By purchasing and consuming local goods and services C. By purchasing construction supplies D. By purchasing moving services

B. By purchasing and consuming local goods and services

Which of the following best describes the state of the market during the expansion phase of the real estate cycle? A. High but stabilized unemployment and a high number of foreclosures B. Increases in hiring, employment, and public confidence, and lots of buyers in the market C. Properties selling at inflated prices, many buyers in the market, and lots of new construction D. Unemployment increasing, prices falling, and foreclosures on the rise

B. Increases in hiring, employment, and public confidence, and lots of buyers in the market

Which of the following items directly influences real estate supply?

Construction

Which generation financed their homes due to also having other debt obligations? A. Baby Boomers B. Echo Boomers C. Generation X D. Millennials

D. Millennials

In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence, and an increase in buyers in the market?

Expansion

Which government entity oversees open-market operations?

Federal Open Market Committee

Historically, what do property values tend to do over long periods of time?

Increase

What is the general economic impact of mortgage loan payments?

Increase in economic growth

Which of the following is classified as the least liquid on the scale? A.Checking accounts b. Institutional money market funds c. Savings accounts d. Traveler's checks

Institutional money market funds

David purchased a house three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today?

It's difficult to tell. Historically, property values fluctuate up and down in the short term.

Low interest rates makes borrowing ______.

Less expensive

The ease with which an asset is converted to cash is called ______.

Liquidity

In what phase of the real estate cycle do foreclosures rise and home prices fall?

Recession

In which phase of the real estate market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?

Recession

The amount of money a member bank must keep on deposit at its reserve district bank describes ______.

Reserve requirements

Unit of account, medium of exchange, and what other factor define money?

Store of value

What agency receives paper currency prior to its distribution but after it's printed?

The Federal Reserve

Which of the following actions did the Federal Reserve take in response to the 2007 financial crisis? a. Decreased rates b. Decreased reserve requirements c. Increased rates d. Increased reserve requirements

a. Decreased rates

Which was NOT part of the Fed's program quantitative easing? a. The funds available to consumers froze. b. The interest rate decreased. c. The offer of lending money to financial institutions. d. The purchase of securities.

a. The funds available to consumers froze.

Which of the following programs broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates? A. American Recovery and Reinvestment Act of 2009 (ARRA) B. Home Affordable Modification Program (HAMP) C. Home Affordable Refinance Program (HARP) D. Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

C. Home Affordable Refinance Program (HARP)

Which professionals are most utilized by the buyer prior to closing? A. Lenders and real estate agents only B. Lenders, title companies, and home inspectors only C. Lenders, title companies, appraisers, and home inspectors D. Title companies and home inspectors only

C. Lenders, title companies, appraisers, and home inspectors

When consumers make a small down payment, borrow the remaining amount of the purchase price from a lender, and reap the rewards off of hte full investment value, they are demonstrating what concept? A. Collateral B. Disintermediation C. Leveraging D. Levying

C. Leveraging

In the early 2000s, before the 2007 financial crisis, how would you characterize the real estate market? A. High interest rates and high property values B. High interest rates and low property values C. Low interest rates and high property values D. Low interest rates and low property values

C. Low interest rates and high property values

What would likely happen to the real estate market if there were no lenders? A. Construction of new homes would increase. B. Homeownership would increase. C. New construction and home purchases would greatly decrease. D. Nothing would happen.

C. New construction and home purchases would greatly decrease.

The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called the ______ rate.

Discount

In response to the increase in foreclosures and losses on their balance sheets, not to mention a reduced market for subprime loans, many lenders slowed their lending activities. What was the impact of this on the overall economy?

The economy headed into a recession.

Which of the following is a likely effect when the discount window is closed? a. Banks are restricted from making loans to consumers. b. Banks don't have access to additional funds. c. Banks have access to additional funds through their district reserve bank. d. Interest rates plummet.

b. Banks don't have access to additional funds.

During which phase of the real estate cycle is local government most directly involved? A. Construction B. Living C. Moving D. Planning

D. Planning

The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.

Federal funds

Which of the following resources are extremely helpful when working with investors? A> Banking and insurance analysts B. Fannie Mae, Freddie Mac, and Ginnie Mae C. IRS and RealtyTrac® D. REIT analysts and bond rating agencies

D. REIT analysts and bond rating agencies

Which of the following statements is true about national lending intuitions? A. Mortgage-backed securities are offered by credit unions. B. They control the flow of the local money supply. C. They fund loans to borrowers. D. They sell packaged loans to investors.

D. They sell packaged loans to investors.