Question 1

Explain the relationship between syndicates and REITs.

Accepted Answer

A syndicate is a temporary association of individuals or firms, organized to perform a specific task that requires a large amount of capital. A syndicate may be organized as a corporation, a trust, or, most commonly, a limited partnership. REITs also invest in real estate but are more like mutual funds and are traded on stock exchanges. REITs are more liquid than syndicates.

Question 2

What advantages do real estate investments offer?

Accepted Answer

Real estate investments may ha...

Question 3

Investors buy precious metals as a hedge against:

Accepted Answer

A)   recession.
B)   depression.
C)   inflation.
D)   deflation.
E)   rising value of the U.S. dollar.F) A) and B)
G) All of the above

Question 4

Which type of REIT pools money to invest in new shopping malls for the sole purpose of collecting rent?

Accepted Answer

A)   Mortgage
B)   Compound
C)   Hybrid
D)   Simple
E)   EquityF) C) and D)
G) C) and E)

Question 5

If you are a limited partner, you are liable for losses beyond your initial investment.

Accepted Answer

A) True 
 B)False

Question 6

For all types of real estate investments (EXCEPT residential real estate) , the depreciation period is ____________ years.

Accepted Answer

A)   7 1/2
B)   17 1/2
C)   20 1/2
D)   27 1/2
E)   31 1/2F) None of the above
G) B) and E)

Question 7

One of the possible advantages of investing in a real estate limited partnership is that you:

Accepted Answer

A)   don't have to worry about capital gains tax.
B)   don't have to pay federal income tax.
C)   don't have to pay state income tax.
D)   can invest in a shopping center or large building by investing as little as $5,000.
E)   your investment is very liquid.F) A) and B)
G) C) and E)

Question 8

A REIT is a firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.

Accepted Answer

A) True 
 B)False

Question 9

Indirect real estate investments include investing in real estate syndicates, REITs, and participation certificates.

Accepted Answer

A) True 
 B)False

Question 10

An example of a direct real estate investment is a:

Accepted Answer

A)   limited partnership.
B)   real estate dwelling.
C)   real estate syndicate.
D)   real estate investment trust.
E)   mortgage pool.F) B) and D)
G) A) and B) B

Question 11

Which of the following can be a management problem when investing directly in real estate?

Accepted Answer

A)   Maintaining the rental property
B)   Inability to sell your interest in a limited partnership
C)   Disagreements among syndicate members
D)   Limited financial liability
E)   All of these are likely management problems when investing directly in real estate.F) A) and D)
G) C) and E)

Question 12

What are some possible disadvantages of real estate investments?

Accepted Answer

Real estate investments may have these disadvantages: declining values, illiquidity, lack of diversification, and the reduction or elimination of tax advantages.

Question 13

The investment tax credit has been eliminated entirely for all types of real estate except:

Accepted Answer

A)   low-income housing projects.
B)   single-family dwellings.
C)   shopping centers.
D)   raw land.
E)   developed land.F) A) and C)
G) A) and B)

Question 14

Today real estate investors must use accelerated depreciation methods to recover the costs.

Accepted Answer

A) True 
 B)False

Question 15

For residential real estate investments, the depreciation period is ____________ years.

Accepted Answer

A)   7 1/2
B)   17 1/2
C)   20 1/2
D)   27 1/2
E)   31 1/2F) A) and E)
G) A) and D)

Question 16

Land purchases are speculative because they involve many risks.

Accepted Answer

A) True 
 B)False

Question 17

The tax shelter aspect of real estate syndicates no longer exists.

Accepted Answer

A) True 
 B)False

Question 18

A limited partner cannot take part in the management of the partnership.

Accepted Answer

A) True 
 B)False

Question 19

In what type of real estate investment does the investor hold legal title to the property?

Accepted Answer

A)   Ginnie Mae
B)   Participation certificates (PCs) 
C)   Real estate investment trusts (REITs) 
D)   Direct investment
E)   Indirect investmentF) B) and E)
G) A) and B)

Question 20

Owen Cartwright has joined a real estate syndicate that bought an office building in downtown Orlando, Florida. What type of investment does he hold?

Accepted Answer

A)   Direct investment in real estate
B)   Indirect investment in real estate
C)   Equity REIT
D)   Participation certificate
E)   Mortgage REITF) A) and E)
G) All of the above

Exam 17: Investing in Real Estate and Other Investment Alternatives

Explain the relationship between syndicates and REITs.

What advantages do real estate investments offer?

Correct Answer
verified
Real estate investments may ha...
View Answer

Investors buy precious metals as a hedge against:

Correct Answer
verified

Which type of REIT pools money to invest in new shopping malls for the sole purpose of collecting rent?

Correct Answer
verified

If you are a limited partner, you are liable for losses beyond your initial investment.

Correct Answer
verified

For all types of real estate investments (EXCEPT residential real estate) , the depreciation period is ____________ years.

Correct Answer
verified

One of the possible advantages of investing in a real estate limited partnership is that you:

Correct Answer
verified

A REIT is a firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.

Correct Answer
verified

Indirect real estate investments include investing in real estate syndicates, REITs, and participation certificates.

Correct Answer
verified

An example of a direct real estate investment is a:

Correct Answer
verified
B

Which of the following can be a management problem when investing directly in real estate?

Correct Answer
verified

What are some possible disadvantages of real estate investments?

Correct Answer
verified
Real estate investments may have these disadvantages: declining values, illiquidity, lack of diversification, and the reduction or elimination of tax advantages.

The investment tax credit has been eliminated entirely for all types of real estate except:

Correct Answer
verified

Today real estate investors must use accelerated depreciation methods to recover the costs.

Correct Answer
verified

For residential real estate investments, the depreciation period is ____________ years.

Correct Answer
verified

Land purchases are speculative because they involve many risks.

Correct Answer
verified

The tax shelter aspect of real estate syndicates no longer exists.

Correct Answer
verified

A limited partner cannot take part in the management of the partnership.

Correct Answer
verified

In what type of real estate investment does the investor hold legal title to the property?

Correct Answer
verified

Owen Cartwright has joined a real estate syndicate that bought an office building in downtown Orlando, Florida. What type of investment does he hold?

Correct Answer
verified

Exam 17: Investing in Real Estate and Other Investment Alternatives

Explain the relationship between syndicates and REITs.

What advantages do real estate investments offer?

Correct AnswerverifiedReal estate investments may ha...View AnswerShow Answer

Investors buy precious metals as a hedge against:

Correct AnswerverifiedShow Answer

Which type of REIT pools money to invest in new shopping malls for the sole purpose of collecting rent?

Correct AnswerverifiedShow Answer

If you are a limited partner, you are liable for losses beyond your initial investment.

Correct AnswerverifiedShow Answer

For all types of real estate investments (EXCEPT residential real estate) , the depreciation period is ____________ years.

Correct AnswerverifiedShow Answer

One of the possible advantages of investing in a real estate limited partnership is that you:

Correct AnswerverifiedShow Answer

A REIT is a firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.

Correct AnswerverifiedShow Answer

Indirect real estate investments include investing in real estate syndicates, REITs, and participation certificates.

Correct AnswerverifiedShow Answer

An example of a direct real estate investment is a:

Correct AnswerverifiedB

Which of the following can be a management problem when investing directly in real estate?

Correct AnswerverifiedShow Answer

What are some possible disadvantages of real estate investments?

Correct AnswerverifiedReal estate investments may have these disadvantages: declining values, illiquidity, lack of diversification, and the reduction or elimination of tax advantages.

The investment tax credit has been eliminated entirely for all types of real estate except:

Correct AnswerverifiedShow Answer

Today real estate investors must use accelerated depreciation methods to recover the costs.

Correct AnswerverifiedShow Answer

For residential real estate investments, the depreciation period is ____________ years.

Correct AnswerverifiedShow Answer

Land purchases are speculative because they involve many risks.

Correct AnswerverifiedShow Answer

The tax shelter aspect of real estate syndicates no longer exists.

Correct AnswerverifiedShow Answer

A limited partner cannot take part in the management of the partnership.

Correct AnswerverifiedShow Answer

In what type of real estate investment does the investor hold legal title to the property?

Correct AnswerverifiedShow Answer

Owen Cartwright has joined a real estate syndicate that bought an office building in downtown Orlando, Florida. What type of investment does he hold?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Real estate investments may ha...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Real estate investments may have these disadvantages: declining values, illiquidity, lack of diversification, and the reduction or elimination of tax advantages.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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