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Q:
Administrative agencies can be empowered to:
I. Investigate.
II. Prosecute.
III. Hold hearings.
A.I, II, III.
B.I and III.
C.II and III.
D.I and II.
Q:
Which of the following would be considered intangible:
A.Oxygen.
B.A house.
C.Gasoline.
D.Ownership of your books.
Q:
A federal statute has been enacted establishing a national minimum wage of $8.00 per hour.
A.Minnesota may enact a state law making the minimum wage $8.25 within the state.
B.Minnesota must keep their minimum wage at $8.00 per hour and may not go higher.
C.Minnesota may enact a state law making the minimum wage $7.50 per hour within the state for private employers but must honor the $8.00 per hour rate for state and federal government employees within the state.
D.Since the federal government has enacted minimum wage legislation, Minnesota may not make any laws in the area which is now reserved for federal enforcement.
Q:
Sheila goes to the only car dealer in town to purchase a car. She tells the dealer that this will be her first car and that she needs it to travel to a distant city for a new job that starts in two days. After coming to an agreement, the dealer tells her the car will be ready at 9:00 am the next morning. He then asks her out to dinner for that night. Sheila says no. The dealer is very upset at her rejection so he refuses to provide to her the car the next morning breaching the contract. Sheila has no way to get to the new job and she is fired.
A.Sheila can only sue for compensatory damages related to the breach of contract.
B.Sheila can sue for exemplary damages because a tort has been committed.
C.Sheila is entitled to consequential damages because the dealer knew that she needed the car for travel to the new job.
D.Sheila is entitled to nothing because the dinner rejection gave the dealer just cause to breach the contract.
Q:
________ is what a court does when it interprets a statute to determine the intent of the legislature when the statute was enacted.
A.Legislative history.
B.Statutory construction.
C.Judicial definition.
D.Statutory resolution.
Q:
The Uniform Commercial Code applies to:
I. Commercial transactions involving personal property.
II. Real estate.
III. Personal service contracts.
A.I, II, III.
B.I and III.
C.II and III.
D.I only.
Q:
Judge Alan has issued a decision in a mortgage foreclosure case. The issue involved a bank that granted a loan to a person who could not afford the payments. Judge Alan found for the bank, however, in his opinion said that the bank acted legally but unethically and that homeowners should have more protection from such unethical lending policies. He lamented that the current law forced him to find for the bank. When the judge opined about the unethical lending practices and said that he wished he could have helped the homeowner, his statements would be considered:
A.Dicta.
B.Precedent.
C.Stare decisis.
D.A judicial holding.
Q:
The Uniform Commercial Code will not apply to:
A.The purchase of a new computer.
B.The purchase of a used car.
C.The use of a check as payment for a transaction.
D.The contract to hire a cleaning crew to clean your home or office.
Q:
Laws passed by Congress are usually referred to as:
A.Statutes.
B.Codes.
C.Ordinances.
D.Commandments.
Q:
Which of the following is not an area of property law concern?
A.Promises to exchange resources in the future.
B.Patents and copyrights.
C.Trademarks and trade secrets.
D.All of the above are property law concerns.
Q:
Exemplary damages are also called:
A.Compensatory damages.
B.Consequential damages.
C.Punitive damages.
D.Injunctive damages.
Q:
________ jurisprudence believes that law is simply the commands of the state backed up by force and punishment.
A.Historical School.
B.Sociological.
C.Natural law.
D.Positive law.
Q:
The City of Dover has passed a written law banning smoking in most restaurants and bars. Dover has enacted a/an:
A.Statute.
B.Act.
C.Regulation.
D.Ordinance.
Q:
Which statement is true?
I. Substantive laws define rights and duties.
II. Procedural rules provide the machinery to enforce rights and duties.
A.I and II.
B.I only.
C.II only.
D.Neither I nor II.
Q:
The prosperous nations exploit the resources and labor of poor nations through trade so the wealthy nations are prosperous because the poor nations are poor describes the:
A.Wealth dissemination theory.
B.Wealth determination theory.
C.Dependency theory.
D.Dominance theory.
Q:
Mike has entered into a binding agreement to sell a car to Kathy. When Kathy shows up to complete the deal as per the agreement, Mike refuses to go through with the transaction. Which of the following best categorizes Mike and Kathy's issues with regard to classification of laws?
A.This is a public law issue regarding contract law.
B.This is a private law issue regarding contract law.
C.This is a public law issue regarding property law.
D.This is a private law issue regarding criminal law.
Q:
Which of the following is not a type of law dealing with property:
A.Leases.
B.Wills.
C.Trusts.
D.Sales of goods.
Q:
What type of law describes the legal principles that apply to government agencies?
A.Administrative.
B.Constitutional.
C.Criminal.
D.Public.
Q:
Louisiana partially follows a civil law system based on which country?
A.Spain.
B.England.
C.France.
D.Italy.
Q:
The common law system originated in:
A.France.
B.The United States.
C.Spain.
D.England.
Q:
________ means to follow the case precedent.
A.Stare decisis.
B.Constitutional realism.
C.Statutory construction.
D.Constitutional relativism.
Q:
Which of the following is not an advantage of stare decisis applied to case law under common law principles?
A.Stare decisis provides predictability in law.
B.Stare decisis and case law helps specify, in detail, the boundaries of our property based legal system.
C.Case law eliminates conflict of laws problems due to the large number of decisions being made.
D.Case law decisions cannot be overturned once established as precedent so consistence is maintained and assured.
Q:
Under the doctrine of Stare Decisis, courts are bound to follow the holdings and dicta of prior cases.
Q:
By definition, a crime is a wrong against just the victim.
Q:
The Treaty on European Union states that the European Union is founded on the rule of law.
Q:
"Constitutional relativity" stands for the proposition that the meaning of the language found in the Constitution is relative to the time in which it is being interpreted.
Q:
Jurisprudence refers to the law itself and not to the philosophy of law.
Q:
Dicta is not precedent because it is a comment on a matter not necessary to the decision reached.
Q:
The time allowed for one party to sue another party is considered a substantive law issue.
Q:
The most significant uniform law for business is the Uniform Commercial Code.
Q:
Legislation enacted by Congress is called a statute while a law passed by a local government is usually called an ordinance.
Q:
Proposed uniform acts are drafted by the American Commissions Conference on Uniform State Laws.
Q:
Property laws include wills, trusts and estates.
Q:
Legal realism goes past the word of law to examine how laws are enforced, interpreted and applied.
Q:
Procedural law defines rights and duties for the parties.
Q:
Public law encompasses those legal problems and relationships that exist between individuals.
Q:
Whether it's stated in the contract or not, when a breach of contract occurs, the injured party will usually recover her attorney fees as part of her compensatory damages.
Q:
Civil law relies primarily on legislation, while common law relies on court decisions.
Q:
Louisiana is the only state that follows a complete civil law system.
Q:
A decree of specific performance may be issued by a court to help an injured party in cases involving breach of contract and tortuous conduct but not when a statutory violation has occurred.
Q:
Law and "rule of law" are synonymous terms.
Q:
The first known written set of laws was the Code of Hammurabi.
Q:
Which of the following property subtypes is often considered the least vulnerable to functional obsolescence because of its relatively simple structure and long economic life?
A.Industrial warehouse
B.Hotel
C.Retail strip centers
D.Suburban office
Q:
In contrast to maintenance and repair expenditures, which are operating expenses, the improvement decision generally involves a capital expenditure meant to increase the value of the structure. Which of the following classifications of improvements calls for the restoration of a property to satisfactory condition without changing the floor plan, form, or style of the structure?
A.Rehabilitation
B.Remodeling
C.Adaptive reuse
D.Conversion
Q:
The management agreement provides for a management fee that is usually in the range of 3 to 6% of which of the following measures of property income?
A.Potential gross income
B.Effective gross income
C.Net operating income
D.Income tax liability
Q:
Unlike many publicly traded stock and bond investments, commercial real estate investments:
A.can be bought and sold in highly liquid markets.
B.yield maximized returns when assets are held for short periods of time.
C.yield returns generated mostly from the asset's net operating income, rather than price appreciation.
D.have going-in and going-out transaction costs that are low (as a proportion of asset value).
Q:
The use of financial leverage when investing in real estate is a double-edged sword. While increased leverage may allow the investor to "purchase" higher expected returns, the "price" of doing so is an increase in which of the following risks?
A.Liquidity risk
B.Default risk
C.Interest rate risk
D.Pipeline risk
Q:
Which of the following terms refers to the present value of the right to receive a lump sum payment of $1 at the end of a particular year, given a specified discount rate?
A.Net present value
B.Present value factor
C.Future value
D.Net operating income
Q:
Given the following information, calculate the loan-to-value ratio for this property. Loan amount: $450,000, Interest rate: 7.5%, Acquisition price: $550,000
A.0.18
B.0.82
C.0.99
D.1.22
Q:
While the development of the secondary market for mortgages focuses on funding provided by long-term holders of mortgage assets, loan originators still play an important role in the growth of the commercial real estate market. Historically, the most active commercial mortgage originators have been:
A.Mortgage conduits
B.Government Sponsored Enterprises
C.Pension funds
D.Life insurance companies
Q:
Of the $3.6 trillion in outstanding mortgage debt in the U.S., approximately 71% is privately held by institutional and individual investors. Which of the following institutions is the largest single source of private mortgage funds?
A.Savings institutions
B.Life insurance companies
C.Government Sponsored Enterprises
D.Commercial banks
Q:
The pooling of equity capital by investors to purchase real estate in the private market is referred to as syndication. With pooled ownership structures, investors expect to receive all of the following benefits EXCEPT:
A.Diversification.
B.Economies of scale in the acquisition and disposition of properties.
C.The ability to obtain debt financing at the portfolio level.
D.Management control of each of the properties in the syndicate's portfolio.
Q:
The market value of U.S. real estate held by non-real estate corporations is estimated to exceed $2 trillion. All of the following are examples of noninvestible commercial real estate that are held by non-real estate entities EXCEPT:
A.Medical office buildings owned by the doctors
B.Branch offices owned by the bank
C.Plant and equipment owned by steel corporations
D.Assembly plant building owned by a group of investors as part of a sale-leaseback agreement with an auto manufacturer
Q:
There are three major types of REITs: Equity REITs, Mortgage REITs, and Hybrid REITs. Each differs in terms of what they invest in. Which of the following choices best describes the investment focus of an Equity REIT?
A.Invests a significant percentage of their assets in both properties and mortgages
B.Invests primarily in and operates commercial properties
C.Purchases mortgage obligations
D.Purchases ownership interests in shares of pension funds and life insurance companies
Q:
Given the following information, calculate the break-even ratio on the following commercial property. Operating expenses: $650,000, Capital expenditures: $105,000, Potential gross income: $2,500,000, Debt service in the first year: $960,000, Loan amount: $20,000,000, Purchase price: $27,300,000
A.43.7 %
B.55.8 %
C.68.6 %
D.75.2 %
Q:
Commercial real estate loan application packages typically contain cash flow estimates that look at the expected cash flow from rental operations for the subject property. Specifically, lenders provide the borrower with a discounted cash flow analysis commonly referred to as a(n):
A.appraisal report
B.pro forma
C.loan commitment
D.rate lock agreement
Q:
Of the following lending relationships, which gives the borrower the most senior claim to the cash flows associated with a property?
A.Straight debt
B.Joint venture
C.Land sale-leaseback
D.Complete sale-leaseback
Q:
With respect to bearing the risk of future property price fluctuations, which of the following lending relationships is viewed as the most risky from the borrower's perspective?
A.Straight debt
B.Joint venture
C.Land sale-leaseback
D.Complete sale-leaseback
Q:
An interest-only balloon mortgage loan is commonly referred to as a(n):
A.Mini-perm loan
B.Mezzanine loan
C.Land acquisition loan
D.Bullet loan
Q:
Significant tax benefits can be gained by using an alternative financing arrangement for commercial property transactions. When the seller allows the buyer to pay the purchase price over a number of years, recognition of the taxable gain can be spread over several years, thereby reducing the present value of the tax payments. This type of financing arrangement is commonly referred to as a(n):
A.installment sale
B.joint venture
C.land sale-leaseback
D.complete sale-leaseback
Q:
An alternative vehicle for financing commercial property involves having the lender acquire an ownership (equity) interest in the property by supplying a portion of the required equity capital in addition to providing the permanent debt financing. This type of financing arrangement is commonly referred to as a(n):
A.installment sale
B.joint venture
C.land sale-leaseback
D.complete sale-leaseback
Q:
Given the following information, calculate the lender's yield. Loan amount: $166,950, Term: 30 years, Interest rate: 8 %, Payment: $1,225.00, Discount points: 2.
A.7.7%
B.8.0%
C.8.2 %
D.10.0 %
Q:
Given the following information on a 30-year fixed-payment loan, determine the remaining balance that the borrower has at the end of seven years. Interest Rate: 7%, Monthly Payment: $1,200.
A.$17,143
B.$79,509
C.$164,402
D.$180,369
Q:
Given the following information on a fixed-rate loan, determine the maximum amount that the lender will be willing to provide to the borrower. Loan Term: 30 years, Monthly Payment: $800, Interest Rate: 6%.
A.$6,707
B.$9,295.15
C.$13,333
D.$133,433
Q:
In considering a three-year-one-year adjustable-rate mortgage (ARM), the interest rate will be fixed for how many years?
A.One year
B.Two years
C.Three years
D.Four years
Q:
Assume that a piece of land is currently value at $50,000. If this piece of land is expected to appreciate at an annual rate of 5% per year for the next 20 years, how much will the land be worth 20 years from now?
A.$100,898.99
B.$112,633.09
C.$123,860.81
D.$132,664.89
Q:
The purchase price of a piece of property is $70,000. After analysis of the cash flows, expected sales price, and expected yield, the investor decides the deal has a present value (PV) of $80,000. What is the net present value (NPV), and should the investor take the deal?
A.$10,000; Yes
B.$10,000; No
C.-$10,000; Yes
D.-$10,000; No
Q:
Suppose that a tenant is interested in renting out a two-bedroom apartment for $1000 a month for the next year. While the tenant requires rent to be paid at the beginning of the month, he will not be depositing the rental check into a local savings account until the end of each month. If the annual interest that the tenant can earn on this account is 5% and interest is compounded monthly, how much will the tenant have in his savings account at the end of the year?
A.$12,278.86
B.$12,613.94
C.$13,330.02
D.$15,917.13
Q:
The rate that is used to discount expected future cash flows can be thought of as the return the investor is forgoing on an alternative investment of equal risk. In this framework, the discount rate is being thought of as which of the following?
A.Net present value
B.Opportunity cost
C.Closing cost
D.Future value
Q:
Assuming all else the same, the future value of an annuity due will be _____________ that of an ordinary annuity.
A.Greater than
B.Equal to
C.Less than
D.Incomparable to
Q:
Assume an investor with $5000 to invest is considering several alternatives, each covering ten years. Which of the following alternatives would you expect the investor to choose accounting for the time-value-of-money in your calculations?
A.Investor receives $500 at the end of year 1, plus the original $5000 at the end of year 10.
B.Investor receives $50 at the end of each year for 10 years, plus the original $5000 at the end of 10 years.
C.Investor receives $500 at the end of the 10th year, plus the original $5000.
D.Investor receives $5000 at the end of year 10.
Q:
In general, most contracts - including real estate contract - can be assigned. All of the following statements regarding assignment are true EXCEPT:
A.Any type of personal performance contracted by one party cannot be assigned without that party's permission.
B.Land contracts are not assignable without the owner's permission.
C.If buyer's of real estate assign the contract, the new buyers may pay the agreed upon price and obtain title to the property.
D.When buyers assign their rights to someone else, they escape liability under the original contract.
Q:
The recent emergence of discount brokerage services has had a modes effect on the price of brokerage services. The average commission that a broker could expect to receive today would most likely range between:
A.1-2%
B.3-4%
C.5-6%
D.7-10%
Q:
Total mortgage debt outstanding at the end of 2008 approached $14.6 trillion. Which of the following types of mortgage loans accounts for the greatest percentage of mortgage debt outstanding?
A.Residential (1-4 family)
B.Apartment (multifamily)
C.Commercial
D.Farm
Q:
When personal property items such as a range, refrigerator, and household furnishings may be included in the home loan, which usually carries a longer term and lower interest rate than if the borrower had financed these items with a separate consumer loan, this is referred to as a:
A.Purchase-money mortgage (PMM)
B.Package mortgage
C.Home equity loan
D.Reverse mortgage
Q:
One of the main distinctions between commercial mortgage loans and residential mortgage loans lies in the personal liability of the borrower. With residential loans, the lender can hold the borrower personally liable in the event of a default. Such loans are commonly referred to as:
A.recourse loans
B.nonrecourse loans
C.conforming loans
D.nonconforming loans
Q:
While there is no specific number of comparables that is right for every appraisal assignment, how many comparable sales are considered adequate as long as the properties are very similar to the subject property?
A.One
B.Three
C.Five
D.Ten
Q:
The right to pay unpaid taxes, plus interest and penalties, before public sale and to reclaim full title of the property is referred to as:
A.inverse condemnation
B.foreclosure
C.equity right of redemption
D.regulatory taking
Q:
While most property taxes are levied in order to finance services that benefit the community, special assessments are levied to pay for specific improvements that benefit a particular group of properties. All of the following characteristics of special assessments are true EXCEPT:
A.They are considered ad valorem taxes.
B.They are applied as pro rata charges.
C.They are levied directly on the properties benefited.
D.They are commonly used to finance streets, storm water systems, sidewalks, and other area improvements.
Q:
A traditional zoning ordinance includes all of the following EXCEPT:
A.Minimum setback requirements
B.Minimum lot dimensions
C.Provisions for special use districts
D.Performance standards