Hondros Learning™

Certified Residential:Statistics, Modeling, and Finance

Final Exam Answer Key

Reference: Chapter 1

  1. The mathematical process concerned with collecting, organizing, and examiningdata is
  2. analysis.
  3. assessment.
  4. interpolation.
  5. statistics.

Reference: Chapter 1

  1. Which statement contains an analytical statistic?
  2. A die (one of a pair of dice) has six sides.
  3. A die rolled 50 times came up “6” ten times.
  4. The die weighs 0.693 ounces.
  5. The probability of any one side landing face up is 16.67%.

Reference: Chapter 1

  1. Which of these terms isNOT related?
  2. data
  3. odds
  4. population
  5. sample

Reference: Chapter 1

  1. In final data analysis, an appraiser should give the greatest weight to
  2. accuracy.
  3. algorithm.
  4. judgment.
  5. standard deviation.

Reference: Chapter 1

  1. A high confidence interval will usually
  2. be usedonly with data sets less than 100.
  3. be used only with data sets greater than 100.
  4. create a credible result.
  5. create a noncredible result.

Reference: Chapter 2

  1. Which is synonymous with “average?”
  2. mean
  3. median
  4. mode
  5. standard deviation

Reference: Chapter 2 Pages

  1. Which calculation assigns datum points a percentage of the total to compensate for data that may not be truly representative of the sample or population?
  2. adjusted average
  3. biased mean
  4. skewed average
  5. weighted mean

Questions 8–11 refer to following data:

Seven gross rent multipliers have been calculated for a subdivision. They are:

80, 82, 84, 82, 79, 85, and 82.

Reference: Chapter 2

  1. What is the mean gross rent multiplier?
  2. 80
  3. 81
  4. 82
  5. 83

Reference: Chapter 2

  1. What is the median gross rent multiplier?
  2. 80
  3. 81
  4. 82
  5. 83

Reference: Chapter 3

  1. What is the range for the multipliers calculated?
  2. 4
  3. 5
  4. 6
  5. 7

Reference: Chapter 2

  1. What is/are the mode(s) of the gross rent multipliers data set?
  2. 7
  3. 79 and 85
  4. 82
  5. no mode

Reference: Chapter 3

  1. What term describes the collection of every possible data point?
  2. census
  3. complete sample
  4. population
  5. universe

Reference: Chapter 3

  1. When gathering data for statistical analysis, which economic principle is most important?
  2. anticipation
  3. change
  4. conformity
  5. substitution

Reference: Chapter 3

  1. The average distance of a datum point from the center of the data setis represented by
  2. a fractile.
  3. parameter.
  4. standard deviation.
  5. the median’s mean.

Reference: Chapter 3

  1. The median is an example of
  2. fractiles.
  3. matched pair analysis.
  4. regression analysis.
  5. statistical probability.

Reference: Chapter 4

  1. Collecting and analyzing data to forecast what is likely to happen in the future based on what has happened in the past is
  2. estimating.
  3. extrapolation.
  4. forecasting.
  5. statistical inference.

Reference: Chapter 4

  1. As the size of the data set ______, the reliability of the analysis ______.
  2. decreases, decreases.
  3. decreases, increases.
  4. increases, decreases.
  5. increases, remains unchanged.

Reference: Chapter 4

  1. With a data set containing more than 200 observations, the appraiser gives the greatest weight to the
  2. amount of data.
  3. mode.
  4. nearness of the data to the mean.
  5. range.

Reference: Chapter 4

  1. A proper statistical analysis is based on what type of data?
  2. forecasted
  3. historical
  4. sale price
  5. universal

Reference: Chapter 4

  1. Properties a lender takes back through foreclosure and now owns are
  2. lender foreclosed.
  3. lender owned.
  4. real estate owned.
  5. real property assets.

Reference: Chapter 5

  1. What mathematical process is the basis for most AVMs and AAVMs?
  2. normal distribution of data
  3. progression analysis
  4. regression analysis
  5. standard deviation

Reference: Chapter 5

  1. The term ad valorem is used most often in reference to calculating the
  2. GLA.
  3. gross rent multiplier.
  4. real property taxes.
  5. reconciliation process.

Reference: Chapter 5

  1. Another name for beta coefficient is
  2. alpha factor.
  3. coaxial.
  4. slope of the regression line.
  5. trend line angle.

Reference: Chapter 5

  1. The relationship among three or more variables is examined using which type of analysis?
  2. multiple progression
  3. multiple regression
  4. polynomial regression
  5. simple progression

Reference: Chapter 5

  1. Which analytical model is generally the most accurate?
  2. AAVM
  3. AVM
  4. BPO
  5. CMA

Reference: Chapter 7

  1. The calendar date on which property value is established is the
  2. applied date.
  3. effective date.
  4. inspection date.
  5. report date.

Reference: Chapter 7

  1. The variablewith the greatest impact on real property affordabilityis
  2. compounding term.
  3. interest rate.
  4. macroeconomics.
  5. microeconomics.

Reference: Chapter 7

  1. A purchase money mortgage is most often associated with
  2. convention loans.
  3. FHA and VA loans.
  4. nonconforming loans.
  5. seller financing.

Reference: Chapter 7

  1. Most real estate transactions use two forms of capital. What are the two primary sources?
  2. banks and saving and loans
  3. debt and equity
  4. lenders and insurance companies
  5. mortgage bankers and mortgage bankers

Reference: Chapter 7

  1. Mortgage interest ratesare established by
  2. EE government-issued saving bonds.
  3. lenders in the marketplace.
  4. supply and demand.
  5. the Federal Reserve Bank.

Reference: Chapter 7

  1. What is the major difference between a mortgage banker and a mortgage broker?
  2. Mortgage bankers can make loans in excess of $250,000 and brokers cannot.
  3. Mortgage bankers have their own source of funds and brokers do not.
  4. Nothing, they are the same.
  5. The mortgage banker is state regulated and the broker is not.

Reference: Chapter 7

  1. When the reported sale price for a comparable includes a boat and trailer valued at $5,000, what adjustment is made to the subject?
  2. -$5,000
  3. -$2,500
  4. $0
  5. +$5,000

Reference: Chapter 7

  1. What is the relationship between the APR and the loan amount, relative to a fixed monthly payment?
  2. As the APR decreases the loan amountdecreases.
  3. As the APR decreases the loan amount increases.
  4. As the APR increases or decreases the loan amount remains unchanged.
  5. As the APR increases the loan amountincreases.

Reference: Chapter 8

  1. What term describes a lender who does NOT sell loans to the secondary market?
  2. conventional
  3. end
  4. non-conforming
  5. portfolio

Reference: Chapter 8

  1. Ten- and thirty-year Treasuries are the basis for which interest rate?
  2. EE savingsbond rate
  3. Federal Reserve rate to member banks
  4. long-term mortgage rate
  5. prime rate

Reference: Chapter 8

  1. The Federal Reserve Board is likely to raise interest rates when the
  2. economy is growing too quickly.
  3. economy is not growing fast enough.
  4. federal income tax rates are not producing enough revenue.
  5. new housing starts are down.

Reference: Chapter 8

  1. Ginnie Mae was created in 1968 as a replacement for
  2. Fannie Mae.
  3. Freddie Mac.
  4. Sallie Mae.
  5. the FHA Guarantee Loan Program.

Reference: Chapter 9

  1. A non-conformingloan does NOT conform to the underwriting guidelines of the
  2. FHA and VA.
  3. Mortgage Bankers Association.
  4. Office of Thrift Management.
  5. secondary market.

Reference: Chapter 9

  1. Which is NOT a conventional loan?
  2. 30-year fixed rate
  3. 20-year fixed rate with balloon
  4. 15-year adjustable rate
  5. FHA

Reference: Chapter 9

  1. A larger-than-normal payment at the end of the term that pays off a loan’s remaining balance is the
  2. adjusted final.
  3. balloon.
  4. ending balance.
  5. termination.

Reference: Chapter 9

  1. A house sold for $180,000, with a 75% loan-to-value mortgage.The lender charged 3 points in closing costs. What is the amount of closing costs paid?
  2. $1,800
  3. $3,650
  4. $4,050
  5. $4,800

Reference: Chapter 10

  1. Converting future cash flows into present value is
  2. annuity analysis.
  3. discounting.
  4. future value.
  5. negative compounding.

Reference: Chapter 10

  1. Which concept is the basis for the statement, “A dollar today is generally worth more than a dollar received in the future?”
  2. compound theory of money
  3. discount theory of money
  4. equalization theory
  5. time value of money

Reference: Chapter 10

  1. Using either interest tables or a financial calculator, calculate the monthly payment on an $80,000 loan for 15 years at 6% interest.
  2. $445
  3. $507
  4. $675
  5. $762

Reference: Chapter 10

  1. What is one of the major disadvantages to financial tables?
  2. Information is cursory.
  3. Tables are limited to specified rates and loan terms.
  4. They are more difficult to use than calculators.
  5. You can use them anywhere.

Reference: Chapter 10

  1. A condo association will need a new parking lot in 20 years.Which function would you use to calculate the amount of money to set aside each month to pay for the new lot when it is needed?
  2. amortization
  3. future value of a $1 per period
  4. present value of a $1 per period
  5. sinking fund factor

Reference: Chapter 11

  1. When funds are borrowed at an interest rate greater than the investment rate, what occurs?
  2. greater cash flows
  3. inverse cap rate
  4. negative leverage
  5. positive leverage

Reference: Chapter 11

  1. What is the balance on a $120,000 loan, at 8% interest for 30 years, after seven years of monthly payments?
  2. $ 97,651.01
  3. $105,895.45
  4. $110,972.92
  5. $115,234.02

Reference: Chapter 11

  1. Generally, what effect does low-interest creative financing have on the market price of a comparable?
  2. decrease
  3. decrease inversely to the lower rate
  4. increase
  5. no affect

Reference: Chapter 11

  1. What remains when debt service is subtracted from NOI?
  2. cash flow
  3. net income
  4. principal
  5. reserves