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About 90% of REITs are ________ REITs.


A) equity
B) mortgage
C) hybrid
D) participation
E) government

F) A) and B)
G) C) and D)

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Federal law requires that no more than half the shares in a REIT may be owned by 15 or fewer people.

A) True
B) False

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A REIT must invest all of its assets in real estate according to federal law.

A) True
B) False

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Aside from a home,the real property investment most widely favored by the small investor is:


A) a post office building.
B) land.
C) a large apartment building with 100 or more apartments.
D) a condominium.
E) the duplex,fourplex,or small apartment building.

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

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

A) True
B) False

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Lynn Roy owns three two-carat diamonds that she received from her grandmother,who did not believe in banks,stocks,or bonds.What type of investment does she hold?


A) Direct investment in real estate
B) Indirect investment in real estate
C) Precious metals
D) Collectibles
E) Precious stones

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

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What are some possible disadvantages of real estate investments?

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Real estate investments may ha...

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In what type of real estate investment does the investor not hold legal title to the property?


A) Vacation homes
B) Undeveloped land
C) Apartments
D) Direct investment
E) Indirect investment

F) D) and E)
G) B) and D)

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Harrison Ford has invested in something that acts like a mutual fund and that derives income from interest on loans to real estate owners.He knows there are federal laws that require this type of investment to refrain from engaging in speculative,short-term holding of real estate to sell for quick profits.What type of investment has Harrison made?


A) Limited partnership
B) Equity REIT
C) Mortgage REIT
D) Hybrid REIT
E) Participation certificate

F) B) and E)
G) D) and E)

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Which type of REIT owns and operates income-producing real estate?


A) Compound
B) Equity
C) Mortgage
D) Hybrid
E) Simple

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

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There are three types of REITs: equity REITs,mortgage REITs,and hybrid REITs.

A) True
B) False

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A syndicate is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.

A) True
B) False

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According to the National Association of Realtors,home values nearly double every ________ years.


A) 5
B) 6
C) 7
D) 10
E) 11

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

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Which of the following is an advantage of investing in limited partnerships,REITs,mortgages,or participation certificates?


A) A possible hedge against inflation
B) Easy entry
C) No management concerns
D) Financial leverage
E) All of these

F) C) and D)
G) All of the above

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An example of an indirect real estate investment is a:


A) single family dwelling.
B) duplex.
C) apartment.
D) undeveloped land.
E) mortgage pool.

F) B) and D)
G) All of the above

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For all types of real estate investments,except residential ones,the depreciation period is ________ years.


A) 7 1/2
B) 17 1/2
C) 20 1/2
D) 27 1/2
E) 31 1/2

F) C) and D)
G) B) and E)

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