Chapter 10
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