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Exam 17: Investing in Real Estate and Other Investment Alternatives

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Question 31

Multiple Choice

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

A) Mortgage
B) Compound
C) Hybrid
D) Simple
E) Equity

F) A) and D)
G) C) and D)

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Question 32

Multiple Choice

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Which of the following do not create management problems?

A) REITs
B) mortgages
C) participation certificates
D) limited partnerships
E) None of these create management problems.

F) C) and E)
G) C) and D)

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Question 33

Multiple Choice

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The ability of investors to deduct their real estate losses from wages,salaries,dividends,and interest is an aspect of a real estate syndicate that:

Ginnie Maes are backed by the full faith and credit of the Federal Government.

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

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

A vacation home is deemed a second home so long as you rent it no more than ________ per year.

First and second mortgages may potentially provide relatively high rates of return due to their special risk characteristics.

Collectibles may be difficult to sell at the right price on short notice.

Which of the following is a possible disadvantage of real estate investments?

Which one of the following real estate investments provides various levels of diversification?

Andrea Mitchell has joined a real estate syndicate.The syndicate she belongs to was formed by one individual who sold participation units to Andrea and several others.The individual who sold the participation units has unlimited liability and manages the property.Andrea and the others can only lose their initial investment.What type of real estate syndicate has Andrea joined?

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

Collecting for investment purposes is very similar to collecting as a hobby.

A REIT must invest all of its assets in real estate according to federal law.

You may invest in gold by purchasing the common stocks of gold mining companies.

One of the advantages of being a limited partner in a real estate investment venture is that you have ____________ liability for losses beyond your initial investment.

Easing of international tensions or disinflation cause gold prices to:

What are some possible disadvantages of real estate investments?

Lynn Roy owns three,two-carat diamonds that she received from her grandmother who did not believe in banks or stocks and bonds.What type of investment does she hold?