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Exam 17: Investing in Real Estate and Other Investment Alternatives

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Question 31

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Explain the relationship between real estate syndicates and REITs.

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A syndicate is a temporary association o...

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Question 32

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The median price of existing homes:

A) has increased over the past 30 years,thereby acting as a hedge against inflation.
B) has risen less than the Consumer Price Index.
C) always increases in value.
D) tends to be countercyclical,thereby acting as a hedge against the business cycle.
E) remains constant over time.

F) B) and C)
G) A) and E)

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Question 33

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During which of the following economic periods is the price of a precious metal,such as rhodium,silver or platinum,likely to increase?

Collectibles include rare coins,works of art,antiques,stamps,rare books,paintings,and other items that appeal to collectors and investors.

It is much easier today to find and trade in collectibles than it was in prior years.Which one of the following is primarily the reason for this?

If a gold bullion bar does not remain in the possession of the dealer or bank that sells it,what must happen before it can be resold?

In what type of real estate investment do you assume the role of a mortgage or student loan lender receiving interest and principal by check each month?

High interest rates depress gold prices,because they make it very expensive to carry gold as an investment.

If you want a risk-proof real estate investment,participation certificates are for you.

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

A REIT is similar to a mutual fund or an investment company,and it trades on stock exchanges or over-the-counter.

Real estate investments provide ________ protection against inflation.

You can gain entry to a shopping center investment by investing $5,000 in a limited partnership.

Which of the following is an investment where a trustee holds legal title to the investment?

On small gold bars,gold dealers and banks add a five to eight percent premium over the pure gold bullion value.

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

In a direct real estate investment,the investor holds legal title to the property.

A REIT may engage in speculative,short-term holding of real estate for the purpose of selling it for quick profits.

Unlike stocks and bonds,precious metals sitting in vaults earn no income.

Limited partnerships and syndicates are examples of direct real estate investment.