PERSONAL FINANCE CHAPTER 17

In a direct real estate investment, the investor holds legal title to the property. True
Limited partnerships and syndicates are examples of direct real estate investment. False
Which one of the following is not required of a REIT by federal law? Making direct investments only in apartment houses, shopping malls, and other commercial property
Real estate investments are classified as: direct or indirect
An example of an indirect real estate investment is a(n): participation certificate
If you are a limited partner, you are liable for losses beyond your initial investment. false
Financial leverage is the use of borrowed funds for investment purposes. true
Diane Chambers buys an apartment building for $2 million. Which one of the following exhibits the highest degree of financial leverage? $100,000 down payment and loan of $1,900,000
Real property equity investments are usually considered attractive during times of: inflation.
One of the advantages of being a limited partner in a real estate investment venture is that you have ____________ liability. limited financial
The Tax Reform Act of 1986 adversely affected the investment potential of real estate syndicates. true
Perhaps the largest drawback of direct real estate investments is the absence of large, liquid, and relatively efficient markets for them. True
Deflation in commercial real estate began sporadically in the: 1980s.
Illiquidity in real estate means that: you cannot quickly sell the property.
Diversification in direct real estate investments is: difficult and expensive.
During which of the following economic periods is the price of a precious metal, such as gold, silver or platinum, likely to increase? Deflationary
Investors buy precious metals as a hedge against: inflation.
Easing of international tensions or disinflation cause gold prices to: decline.
Increasing interest rates in the economy cause gold prices to: decline.
High interest rates depress gold prices because they make it very expensive to carry gold as an investment. true

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