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QUIZ #1 - CHAPTERS 1, 2, & 3  

Choose the BEST answer

1. Real property can become personal property by: 

               a. severance 
               b. purchase
               c. hypothecation 
               d. attachment 

2. According to law, a trade fixture is: 

              a. a fixture 
              b. an easement
              c. personalty
              d. a license 

3. When supply increases and demand remains stable: 

             a. prices go down 
             b. prices stabilize
             c. prices go up 
             d. prices overinflate 

4. The phrase “bundle of legal rights” is properly included in: 

            a. the definition of real property
            b. a legal description 
            c. real estate transaction
            d. leases for less than one year 

5. Land is considered to be: 

           a. indestructible
           b. a wasting asset
           c. immune to the forces of supply & demand
           d. subordinator to real property rights 

6. Personal property includes all of the following EXCEPT: 

           a. chattels 
           b. trade fixtures
           c. emblements 
           d. fixtures 

7. Fixtures are: 

          a. real property 
          b. chattels
          c. removable by a tenant before the expiration of the lease 
          d. removable by a tenant after the expiration of the lease 

8. All of the following are economic characteristics of land EXCEPT: 

          a. scarcity 
          b. permanence of investment
          c. uniqueness
          d. area preference 

9. The definition of land is all of the following EXCEPT : 

          a. air rights 
          b. improvements
          c. surface rights
          d. subsurface rights 

10. The rights of ownership of real property include all of the following
       EXCEPT: 

           a. disposition 
           b. improvements 
           c. control
           d. compatibility 

11. Which of the following is considered to have the greatest impact on the value of
      property? 

           a. area preference 
           b. permanence of investment
           c. scarcity 
           d. uniqueness 

12. A development that includes office space, stores and residential units could be an
      example of any of the following EXCEPT a:

           a. converted use property
           b. mixed-use development
           c. planned unit development
           d. condominium property 

13. All of the expenses may be deducted from a homeowner’s gross income for
       income tax purposes EXCEPT: 

           a. loan prepayment penalties 
           b. loan discount points
           c. monthly loan payments
           d. real estate taxes 

14. A “rule-of-thumb” formula for affording a home purchase based on gross
       monthly income is: 

           a. piti should not exceed 28% 
           b. piti should not exceed 64%
           c. piti should not exceed 36% 
           d. piti should not exceed 1/4 

15. G has a basis of $50,545 in her primary residence. She sells the home for $75,000.
      The broker’s commission was 7% and other selling expenses were $455. What
      was G’s gain on this transaction?

            a. $18,750 
            b. $20,705
            c. $24,455
            d. $21,160 

16. Most homeowner’s insurance policies contain which of the following clauses? 

            a. a property improvement clause 
            b. a co-ownership clause
            c. a co-insurance clause
            d. a property devaluation clause

17. A rancher owns a parcel of land on which oil was discovered. If the rancher has
      not previously conveyed the oil rights, who owns the oil? 

            a. the rancher 
            b. the tenant to whom the property has been leased
            c. the state government 
            d. the federal government 

18. Property management, appraisal, financing and development are all examples of: 

            a. factors affecting demand
            b. specialization within the real estate industry 
            c. non-real estate professional 
            d. government regulation of the real estate industry 

19. The populations of a town suddenly increases. Which of the following is most
       likely to occur? 

            a. rental rates fall due to increased competitions 
            b. demand for housing decreases 
            c. construction of new homes will be delayed 
            d. real estate prices will increase 

20. Homeowners in designated flood areas must obtain flood insurance to 

            a. qualify for federal or federally related mortgages 
            b. disclose that the house floods in heavy rains 
            c. fund a local municipality’s reserves for paying claims 
            d. insure they have enough money coming in case of a loss 

Quiz #1 - Chapters 1, 2 & 3
ANSWERS

1. A 11. A 21. 31. 41. 51.
2. C 12. D 22. 32. 42. 52.
3. A 13. C 23. 33. 43. 53.
4. A 14. A 24. 34. 44. 54.
5. A 15. A 25. 35. 45. 55.
6. D 16. B 26. 36. 46. 56.
7. A 17. A 27. 37. 47. 57.
8. C 18. B 28. 38. 48. 58.
9. B 19. D 29. 39. 49. 59.
10. D 20. A 30. 40. 50. 60.
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