Question

5.A downside of investing in income property is a. low degree of financial leverage. b. maintenance...

5.A downside of investing in income property is

a. low degree of financial leverage.
b. maintenance costs.
c. high taxes.
d. appreciation in value.
e. depreciation.

7.An example of a commercial property is a(n)

a. office building.
b. hotel.
c. warehouse.
d. shopping mall.
e. All of these choices are correct.

15.

When evaluating a real estate investment, the main consideration is changes in the property value.

a. True
b. False

21.

Financial leverage is less of a factor in real estate investment returns than with other types of investments.

a. True
b. False

22.

Mutual fund conversion privileges can often be exercised online.

a. True
b. False

24.

Expected cash flows from real estate investments are determined by

a. depreciation.
b. rent.
c. taxes.
d. All of these choices are correct.
e. None of these choices are correct.

30.

An investment option that allows fund shareholders to funnel fixed amounts of money from their paychecks or bank accounts automatically into a mutual fund is a(n)

a. automatic investment plan.
b. conversion privilege.
c. retirement plan.
d. automatic reinvestment plan.
e. systemic withdrawal plan.

31.

Money funds are high in both liquidity and risk.

a. True
b. False
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Homework Answers

Answer #1

5. a downside of investment in income property is high maintainance cost. As a property on rent can be an opertaing lease wherein the maintenance cost is borne by the owner.

7. Example of commercial building is all of the above i.e. office building, hotel, warehouse, shopping mall as all of these have properties have been taken by the owner to rent out in the first place.

15. when evluating a eal estate investment, the main consideration is done with respect to changes in property value. This is true because an appreciation in property gives huge amount of capital gains to an investor.

21. Financial leverage is less of a factor in real estate invetsment, this is not true. financial leverage wherever taken , incrases the return on equity in addition to increasing the risk.

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