BSAD 295 Solution 1
CHAPTER 1
THE NATURE OF REAL ESTATE AND REAL ESTATE MARKETS
Test Problems
1. A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:
b. User market
2. The market in which required rates of return on available investment opportunities are determined is referred to as the:
d. Capital market
3. The actions of local, state, and federal governments affect real estate values
d. All of the above
4. Approximately what portion of U.S. households own their own home?
b. Approximately two-thirds
5. Of the following asset categories, which class has the greatest aggregate market value?
d. Nongovernment real estate
6. Storm water drainage systems are best described as:
b. Improvements to the land
7. What is the single largest asset category, in terms of value, in the portfolio of the typical U.S. household?
a. Housing
8. Real estate markets differ from other asset classes by having all of the following characteristics except:
d. Homogeneous product
9. Which of the following is not important to the location of commercial properties?
c. Access to schools
10. Which of the following attributes of a home are the most difficult to observe and value? c. location attributes
Study Questions
1. The term real estate can be used in three fundamental ways. List these three alternative uses or definitions.
Solution: Real estate is most commonly defined as land and any improvements made to or on the land, including fixed structures and infrastructure components. The term is also used to describe the “bundle of rights” associated with the ownership and use of the physical characteristics of space and location. Finally, real estate may be described as the business activities related to the development, construction, acquisition, operation, and disposition of real property assets.
2. The U.S. represents about 6 percent of the earth’s land service, or approximately 2.3 billion acres. Who actually owns this land?
THE NATURE OF REAL ESTATE AND REAL ESTATE MARKETS
Test Problems
1. A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:
b. User market
2. The market in which required rates of return on available investment opportunities are determined is referred to as the:
d. Capital market
3. The actions of local, state, and federal governments affect real estate values
d. All of the above
4. Approximately what portion of U.S. households own their own home?
b. Approximately two-thirds
5. Of the following asset categories, which class has the greatest aggregate market value?
d. Nongovernment real estate
6. Storm water drainage systems are best described as:
b. Improvements to the land
7. What is the single largest asset category, in terms of value, in the portfolio of the typical U.S. household?
a. Housing
8. Real estate markets differ from other asset classes by having all of the following characteristics except:
d. Homogeneous product
9. Which of the following is not important to the location of commercial properties?
c. Access to schools
10. Which of the following attributes of a home are the most difficult to observe and value? c. location attributes
Study Questions
1. The term real estate can be used in three fundamental ways. List these three alternative uses or definitions.
Solution: Real estate is most commonly defined as land and any improvements made to or on the land, including fixed structures and infrastructure components. The term is also used to describe the “bundle of rights” associated with the ownership and use of the physical characteristics of space and location. Finally, real estate may be described as the business activities related to the development, construction, acquisition, operation, and disposition of real property assets.
2. The U.S. represents about 6 percent of the earth’s land service, or approximately 2.3 billion acres. Who actually owns this land?