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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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Home ownership rates are highest among those individuals in which age group?

A) Under 34
B) 35 - 44
C) 45 - 54
D) 55 - 64
E) 65 and over

F) D) and E)
G) A) and E)

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Question 32

True/False

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

A) True
B) False

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Question 33

Multiple Choice

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Jeremy Fischer has just purchased 20 American eagle gold coins from a broker. What type of investment does he hold?

The basic unit of gold bullion is one troy ounce.

If you have a vacation home, the after-tax cost of owning it in recent years has:

What are the risks and rewards of investing in precious metals, gems, and collectibles?

The basic unit of gold bullion is one:

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

Direct real estate investments include single-family dwellings, duplexes, apartments, land, and commercial property.

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

The prices of single-family houses:

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?

Diversification in direct real estate investment is difficult because of the large size of most real estate projects.

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

One needs at least $25,000 to indirectly invest in participation certificates.

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

The primary reason people buy a vacation home is because they want to use it.

Besides gold, other metals that are used as a hedge against inflation include the following, except:

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?

Jefferson Davis has invested in something that acts like a mutual fund and that invests in properties all over the country. He knows there are federal laws that require this type of investment to distribute at least 90 percent of the income to shareholders and that requires there be at least 100 shareholders. What type of investment has Jefferson made?