rea mock examination with answer

8/11/2019 REA Mock Examination With Answer

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NAME: ________________________________________________

GOOD LUCK!

PART 1: FUNDAMENTALS

1. The enactment of the Real Estate Service Act created a body that will regulate thereal estate service practice. This regulatory body is nameda. Professional Regulatory Commissionb. Professional Regulatory oard of Real Property Practitionersc. Professional Regulatory Board of Real Estate Serviced. Professional Regulatory oard for Appraisers

!. This term refers to an o"cial in the local government unit# who performs appraisaland assessment of real properties# including plants# e$uipment# and machineries#essentially for ta%ation purposes.

a. Appraiserb. Assessorc. Consultant

d. ro&er

'. A duly registered and licensed natural person who wor&s in a local government unitand performs appraisal and assessment of real properties# including plants#e$uipment# and machineries# essentially for ta%ation purposes is referred to as

a. real estate appraiserb. real estate bro&erc. real estate consultantd. real estate assessor

(. A duly accredited natural person who performs service for# and in behalf of a realestate bro&er who is registered and licensed by the Professional Regulatory oard ofReal Estate Service for or in e%pectation of a share in the commission# professionalfee# compensation or other valuable consideration is referred to as

a. real estate salespersonb. real estate bro&erc. real estate appraiserd. real estate consultant

). This term refers to a person who conducts valuation*appraisal+ speci,cally# one whopossesses the necessary $uali,cations# license# ability and e%perience to e%ecute ordirect the valuation*appraisal of real property.

a. Appraiserb. ro&erc. Assessord. Consultant

-. e,ned as the physical land and those human/made items# which attach to the land.a. Real propertyb. Real estatec. Personal propertyd. Asset

0. The ownership of real estate is calleda. bundle of rights.b. real property.

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c. fee simple.d. freehold.

. 2ncludes all the rights# interests# and bene,ts related to the ownership of real estate.a. bundle of rights.b. real property.

c. fee simple.d. freehold.

3. A term used for the amount as&ed# o4ered# or paid for a good or service.a. Costb. 5aluec. Priced. Replacement cost

16. The price paid for goods or services or the amount re$uired to create or produce thegood or service.

a. 5alueb. Pricec. Cost d. Selling price

11. An economic concept referring to the price most li&ely to be concluded by the buyersand sellers.

a. Costb. Valuec. Priced. 7ar&et

1!. The environment in which goods and services trade between buyers and sellersthrough a price mechanism.

a. Marketb. 7ediumc. Stoc& e%changed. Appraisal

1'. A statement of the fundamental measurement principles of a valuation on a speci,eddate.

a. 7ar&et valueb. Selling pricec. Economic conditiond. Basis of value

1(. 2n mar&ets characterised by e%treme volatility or severe dise$uilibrium betweensupply and demand# the highest and best use of a property may be a * an

a. holding for future use.b. interim use.c. e%isting use.d. commercial utility

1). 8here land use and 9oning are in a state of change# the immediate highest and bestuse of a property may be a * an

a. interi use.b. present use.



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c. residential use.d. commercial use.

1-. This principle holds that a prudent person would not pay more for a good or servicethan the cost of ac$uiring an e$ually satisfactory substitute good or service.

a. Principle of highest and best

b. Principle of anticipationc. Principle of substitutiond. Principle of competition

10. This comparative approach considers the sales# listings or o4ers of similar orsubstitute properties and related mar&et data# and establishes a value estimate byprocesses involving comparison.

a. Market data approachb. Cost approachc. 2ncome approachd. Contractor:s method

1. This comparative approach considers income and e%pense data relating to theproperty being valued and estimates value through a capitalisation process.

a. 7ar&et data approachb. !ncoe approachc. Cost approachd. Residual techni$ue

13. This comparative approach considers the possibility that# as an alternative to thepurchase of a given property# one could ac$uire a modern e$uivalent asset thatwould provide e$ual utility.

a. 7ar&et data approachb. 2ncome approachc. Cost approachd. uilding residual techni$ue

!6. A duly registered and licensed natural person who# for a professional fee# commissionor other valuable consideration# acts as an agent of a party in a real estatetransaction to o4er# advertise# solicit# list# promote# mediate# negotiate or e4ect themeeting of the minds on the sale# purchase# e%change# mortgage# lease or ;ointventure# or other similar transactions on real estate or any interest therein.

a. Real estate appraiserb. Real estate salespersonc. Real estate brokerd. Real estate developer

!1. 2n asset valuation# this term refers to the ad;ustments made to the cost ofreproducing or replacing the asset to re and e%ternal =economic> obsolescence in order to estimate the value ofthe asset.

a. eteriorationb. "epreciationc. Replacement costd. Reproduction cost



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!!. 2n property appraisal# these are suppositions ta&en to be true# involving facts#conditions# or situations a4ecting the sub;ect =property being appraised># or theapproach in the valuation.

a. Assuptionsb. 7ar&et conditionsc. Perceptions

d. ?bservations

!'. A duly registered and licensed natural person who# for a professional fee#compensation or other valuable consideration# o4ers or renders professional adviceand ;udgment on@ =i> the ac$uisition# enhancement# preservation# utili9ation ordisposition of lands or improvements thereon+ and =ii> the conception# planning#management and development of real estate pro;ects.

a. Real estate bro&erb. Real estate appraiserc. Real estate consultantd. Real estate developer

!(. These are constraints that maybe imposed by clients or by statutory law that wouldli&ely to a4ect valuation.

a. #iiting Conditionsb. Assumptionsc. ?bservationsd. 5aluation methods

!). A person who possesses the necessary $uali,cations# ability# and e%perience toe%ecute*performed a valuation.

a. Appraiser or valuerb. Consultantc. ro&erd. Salesperson

!-. 2s a valuer or an appraiser who is in the employ of either the entity that owns theassets or the accounting ,rm responsible for preparing the entity:s ,nancial recordand*or reports.

a. E%ternal 5aluerb. Public Sector Appraiserc. !nternal Valuerd. 5aluer eneral

!0. 2s a valuer or an appraiser# together with any associates# has no material lin&s withthe client# an agent acting on behalf of the client or the sub;ect of the assignment.

a. E$ternal Valuerb. 2nternal 5aluerc. Assessor

d. ro&er

!. As provided for in the Philippine 5aluation Standards# the four property types are@a. Real estate# asset# machinery# plant and e$uipmentb. Real property% personal property% businesses and &nancial interestsc. Real estate# ,%ture# chattel and trade relatedd. Real property# machinery# e$uipment and plant



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!3. Bamilies are more aware of recycling their consumer wastes than ever before. This isan e%ample of which &ind of force@

a. Socialb. overnmentalc. Economicd. Environmental

'6. Absolute ownership sub;ect only to limitations imposed by the country is &nown asa. 'ee siple estate.b. easehold estate.c. ease fee estate.d. Severalty.

'1. A duly registered and licensed natural person who# for a professional fee#compensation or other valuable consideration# performs or renders# or o4ersto perform services in estimating and arriving at an opinion of or acts as an e%pert onreal estate values# such services of which shall be ,nally rendered by the preparationof the report in acceptable written form.

a. Real estate appraiserb. Real estate assessorc. Real estate bro&erd. Real estate consultant

'!. 2nterests in items that are not permanently attached or a"%ed to real estate and aregenerally characteri9ed by their moveability.

a. Real estate propertyb. Bi%turesc. Personal propertyd. Chattel

''. Any commercial# industrial# service or investment entity pursuing an economicactivity is referred to as

a. Binancial interestsb. Real propertyc. Personal propertyd. Business

'(. 2nterests in property resulting from the legal division of ownership interests inbusinesses and real property# from the contractual grant of an optional right to buy orsell property at a stated price within a speci,ed period# or from the creation orinvestment instruments secured by pooled real estate assets.

a. usinessb. 'inancial interestsc. Personal propertyd. Real estate investment trust

'). The process of ac$uiring private property for public use is calleda. Eminent domainb. Police powerc. Escheatd. Condenation

'-. A type of business involving a combination of two or more entities that ;oin tounderta&e a speci,c pro;ect.



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a. Syndicationb. imited partnershipc. (oint ventured. eneral partnership

'0. 2n statistics# this term refers to the di4erence between the highest and the lowest

scores.a. Standard deviationb. 7odec. 7eand. Range

'. This economic principle relates to the principle of balance as well as to the principleof contribution. This principle holds that as capital units are added# a certain point isreached where the added units do not contribute value commensurate with theircosts.

a. Principle of substitutionb. Principle of balancec. Principle of contributiond. Principle of increasing and decreasing returns

'3. The right of government to ac$uire private property for public use is referred to asa. einent doain.b. police power.c. escheat.d. ta%ation.

(6. Ta% 2mposed on pro,t presumed have been reali9ed on the sale or disposition of landsand*or buildings.

a. Estate ta%b. Capital gains ta$c. 2nheritance ta%d. Realty ta%

(1. 2n statistics# this term refers to the measurement of how much all the scores in adistribution typically deviate or vary from the mean.

a. Standard "eviationb. 5ariancec. 7oded. Range

(!. An ownership arrangement in which all partners share in investment gains and lossesand each is fully responsible for all liabilities.

a. imited partnershipb. )eneral partnershipc. Doint venture

d. Syndication

('. Ta% imposed on the right to transmit real and personal properties upon death of theproperty owner =decedent>.

a. 2nheritance ta%b. Capital gains ta%c. Estate ta$d. Real estate ta%



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((. Refers to government housing pro;ects which may either be a subdivision or acondominium intended for homeless low/income family bene,ciaries

a. Residential subdivisionb. ow cost housingc. Sociali*ed housingd. 7arginal housing

(). An item that was once personal property that has become part of the real estate isreferred to as

a. Real propertyb. Real estatec. 'i$tured. E$uipment

(-. The purest and most complete form of real estate ownership isa. leased fee estate.b. easehold estate.c. 'ee siple.d. Real property.

(0. The right of government to regulate land use for the public good.a. Escheatb. Eminent domainc. Police po+erd. Ta%ation

(. This describes the value of an asset that has reached the end of its economic life forthe purpose it was made and the asset may still have value for an alternative use orfor recycling.

a. Scrap valueb. Salvage valuec. 7ar&et valued. i$uidation value

(3. The right of governments to ac$uire private property for public use# such as a roadwidening.

a. Einent doainb. E%propriationc. Police powerd. Condemnation

)6. A limitation on the use of real estate through a written legal document that is usuallyrecorded.

a. 7ortgageb. "eed restrictionc. ien

d. Chattel

)1. This term refer to the conveyance of the right to use part of a land for a speci,cpurpose and thus divide the bundle of rights.

a. easeb. Encroachmentc. Easeentd. Contract

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)!. A loan or promissory note that is secured by the real estate.a. easeb. Mortgagec. iend. Chattel

)'. A trespass on another:s land is a from of a * ana. Easementb. Encroachentc. 7ortgaged. Restriction

)(. A government restriction imposed on ownership of real estate that actually meansgoing to the state.

a. Eminent domainb. Police powerc. Escheatd. Ta%ation

)). The most common form of ownership where one person or corporation owns theentire bundle of rights# still sub;ect to governmental and private restrictions.

a. Severaltyb. Condominiumc. eased feed. Real property

)-. This term means is that the property itself cannot be divided# only the ownershipinterest.

a. ease interestb. Real propertyc. ,ndivided interestsd. Binancial interests

)0. A form of ownership in which a corporation owns the land and improvements# and theresidents own stoc& in the corporation. Then# the corporation signs an e%clusive leasewith the tenant/stoc&holder.

a. Cooperativeb. Condominiumc. Time/shared. Severalty

). A form of partial ownership in which other tenants in common purchase the right ofuse*occupancy for a speci,ed period of time# say one wee& per year.

a. Cooperativeb. Condominiumc. -ieshare

d. Severalty

)3. The ,nal step in the valuation process.a. 2denti,cation of the real estateb. ata analysisc. Correlation of valued. Valuation reporting

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-6. Communicates to users and third/party readers the value conclusion and con,rmsthe basis of the valuation# the purpose of the valuation# and any assumptions orlimiting conditions underlying the valuation.

a. Valuation reportb. 5aluation processc. Correlation of value

d. 5aluation approaches

-1. The following statements are true when applied to 5aluation Standards e%cepta. Standards are statements of recogni9ed principles and conceptsb. Standards are statement of best practice in procurement and reportingc. Standards are statements of accepted de,nitionsd. Standards prescribe speci&c ethods of valuation for di/erent

purposes

-!. The value of property to a particular investor# or a class of investors# for identi,edinvestment or operational ob;ectives.

a. !nvestent Valueb. 5alue in usec. oing concern valued. 7ar&et value

-'. An amount above the 7ar&et 5alue that re in acertain unit de,ned such as the space between the interior walls# the ceiling# and the within the development.

a. Cooperativeb. eased fee estatec. Bee simpled. Condoiniu

-). An additional element of value created by the combination of two or more interestswhere the value of the combined interest is worth more than the sum of the originalinterests.

a. Synergistic value.

b. 7ar&et valuec. 2nvestment valued. oing concern value

--. The 2nternational Binancial Reporting Standards adopt these two models for therecognition of property assets in the balance sheet@

a. Cost model and value in use modelb. Cost odel and fair value odelc. Cost model and investment value modeld. Cost model and going concern value model

-0. Assets owned and*or controlled by governmental or $uasi/governmental entities toprovide goods or services to the general public.

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a. Public sector assetsb. Real estatec. 2ncome generating assetsd. Real property

-. This concept is based on the notion that although two or more parcels of real estate

may have physical similarities and closely resemble one another# there may besigni,cant di4erences in how they can be used.a. tilityb. 5aluec. 0ighest and best used. Substitution

-3. The approach to value perceives value as created by the e%pectation of futurebene,ts =income streams>.

a. 7ar&et data approachb. !ncoe approachc. Cost approachd. Allocation

06. This approach to value recogni9es that property prices are determined by the mar&et.7ar&et 5alue can# therefore# be calculated from a study of mar&et prices forproperties that compete with one another for mar&et share.

a. Market data approachb. Cost approachc. Capitali9ation processd. 2ncome approach

01. 8hen data are available# this approach to value is the most direct and systematicapproach to estimating value.

a. Cost approachb. 2ncome approachc. Market data approachd. Residual techni$ue

0!. escribes a valuation where an entire business is transferred as an operational entity.a. )oing concern valueb. 5alue in usec. 7ar&et valued. 2nvestment value

0'. This approach to value is also &nown as the contractor:s method# and is recogni9ed inmost countries.

a. 7ar&et data approachb. Asset based valuationc. Cost approach

d. 2ncome approach

0(. A form of real property# arising from the contractual relationship between one whoowns the property and one who typically receives a non/permanent right to use theproperty in return for rental payments or other valuable economic consideration.

a. #ease interestsb. Bee simplec. Breehold

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d. Condominium

0). 2n business valuation# this approach may be similar to the cost approach used byappraisers of di4erent types of assets.

a. 2ncome approachb. 7ar&et data approach

c. Residual techni$ued. Assetbased approach

0-. Speci,c materials that# by their presence or pro%imity# may have adverse e4ect onproperty value because of their potential to cause harm to life/forms.

a. Bully depreciated buildings and improvementsb. 0a*ardous and to$ic substancesc. Fon/fruit bearing treesd. 2nformal settlers

00. The current cost of replacing an asset with its modern e$uivalent asset lessdeductions for physical deterioration and all relevant forms of obsolescence andoptimi9ation.

a. Replaceent costb. Reproduction costc. Cost to cured. Guantity survey method

0. Refers to the loss in value of an asset resulting from wear and tear over time#including any lac& of maintenance.

a. Bunctional obsolescenceb. Economic obsolescencec. eferred maintenanced. Physical deterioration

03. Refers to loss in value that can be caused by advances in technology that result innew assets being capable of a more e"cient delivery of goods and services.

a. 'unctional obsolescenceb. Economic obsolescencec. eferred maintenanced. Physical deterioration

6. A charge against a property in which the property is security for payment of a debt iscalled a

a. lien.b. mortgage.c. escheat.d. restriction.

1. The Enchanted Hingdom theme par& in Sta. Rosa has had a signi,cant impact on

uses of land in its vicinity for many years and an in


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!. A ,nancial modeling techni$ue used in the income approach to value that is based one%plicit assumptions regarding the prospective income and e%penses of a property orbusiness.

a. irect capitali9ationb. Annuity methodc. "iscounted cash 1o+ analysis

d. 2nvestment method

'. A type of review underta&en to ensure that a valuation meets or e%ceeds thecompliance re$uirements or guidelines of the speci,c mar&et and# at a minimum#conforms to enerally Accepted 5aluation Principles of the Philippine 5aluationStandards.

a. Bield reviewb. Technical reviewc. es& reviewd. Adinistrative revie+

(. The rights and privileges granted to the owner of intangible assets.a. Personal propertyb. undle of rightsc. !ntangible propertyd. Tangible property

). A valuation review that is limited to the data presented in the report# which may ormay not be independently con,rmed.

a. Bield reviewb. Technical reviewc. "esk revie+d. Administrative review

-. This theory involves the concept that land cannot be valued under one highest andbest use while the improvements are valued based on another highest and best use.

a. Consistent useb. Contributionc. alanced. Anticipation

0. Refers to a housing program and pro;ects covering houses and lots or homeless onlyunderta&en by the government or the private sector for the underprivileged andhomeless citi9ens.

a. #o+ cost housingb. Sociali9ed housingc. Subdivision developmentd. liss pro;ect

. A valuation review performed by an appraiser to form an opinion as to whether theanalyses# opinions# and conclusions in the report under review are appropriate#reasonable# and supportable.

a. Bield reviewb. -echnical revie+c. es& reviewd. Administrative review

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3. These are individual properties# such as hotels# fuel stations# and restaurants thatusually change hands in the mar&etplace while remaining operational.

a. Speciali9ed propertiesb. Public sector assetsc. 2nstitutional propertiesd. -rade related properties

36. A revenue/raising procedure# based on the assessed value of property related to ascale of charges de,ned by statute within a speci,ed time/frame.

a. ross income ta%ationb. Ad valore ta$ationc. Capital gains ta%ationd. Estate ta%ation

31. 2n mass appraisal# this is the process of analy9ing sets of property and mar&et data todetermine the speci,c parameters operating upon a model.

a. Standard deviationb. Rangec. 7oded. Calibration

3!. The practice of appraising multiple properties as of a given date by a systematic anduniform application of appraisal methods and techni$ues that allow for statisticalreview and analysis of results.

a. Mass appraisalb. 5aluation processc. 7ultiple regressiond. rid analysis

3'. Represents the ownership interest of a lessor owning real estate that is sub;ect tolease to others

a. easehold fee estateb. #eased fee estatec. Partial interestd. undle of rights

3(. Any form of lease rental arrangement in which the lessor receives a form of rentalthat is based on the earnings of the lessee. Percentage rent is an e%ample.

a. -urnover rentb. ase rentc. 7ar&et rentd. Economic rent

3). Rights generally inherent in the ownership of real estate include are referred to asa. Property rights

b. Real propertyc. Bundle of rightsd. ease interests

3-. At the most fundamental level# value is created and sustained by the interrelationshipof ,ve factors that are associated with any product# service# or commodity. Thesefactors are J

a. tility# need# purchasing power# buyers and sellers

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b. Capital mar&ets# money mar&ets# discount rate and reserve re$uirementsc. ,tility% scarcity% desire% purchasing po+er% and transferabilityd. ocation# si9e# shape# terrain and elevation

30. 2n property mar&ets# this represents the $uantity of property interests that areavailable for sale or lease at various prices in a given mar&et within a given period of

time# assuming labour and production costs remain constant.a. emandb. Purchasing powerc. esirabilityd. Supply

3. 2n property mar&ets# this constitutes the number of possible buyers or renterssee&ing speci,c types of property interests at various prices in a given mar&et withina given period of time# assuming other factors such as population# income# futureprices# and consumer preferences remain constant.

a. "eandb. Supplyc. Active mar&etd. E"cient mar&et

33. This economic principle holds that value is simply a function of the present worth offuture bene,ts.

a. Principle of substitutionb. Principle of contributionc. Principle of anticipationd. Principle of highest and best use

166. Public sector land valuation and ta%ation in the Philippines is the domain oftwo =!> arms of the government# namely@

a. epartment of udget and 7anagement and ocal overnment nitsb. and Registration Authority and ureau of 2nternal Revenuec. #ocal )overnent ,nits and Bureau of !nternal Revenued. ocal overnment nits and Fational Ta% Research Center

161. Related to the property itself# this principle holds that value is achieved andmaintained when all elements are in proper proportion.

a. Principle of conformityb. Principle of balancec. Principle of contributiond. Principle of increasing and decreasing returns

16!. This economic principle holds that as time and mar&et conditions change# sodoes supply and demand for real estate# and thus# the value of real estate.

a. Principle of changeb. Principle of substitution

c. Principle of anticipationd. Principle of progression or regression

16'. This economic principle holds that a prudent purchaser would pay no more fora home than it would cost him or her to build or buy another one.

a. Principle of conformityb. Principle of balancec. Principle of contribution

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d. Principle of substitution

16(. A valuation review that includes inspection of the e%terior and sometimes theinterior of the sub;ect property and possibly inspection of the comparable propertiesto con,rm the data provided in the report.

a. Technical review

b. es& reviewc. Administrative reviewd. 'ield revie+

16). 2t is de,ned as that logical# legal# and most probable use which will yield thegreatest net income to the land over a sustained period of time.

a. 2nterim useb. Actual usec. 0ighest and best used. E%isting use

16-. An KKKKKKKKKKKKKK mar&et is one that is characteri9ed by goods or services thatare easily produced and readily transferable# with a large number of buyers andsellers.

a. Activeb. Calmc. 2ne"cientd. E2cient

160. This theory is based on the idea that the greater the volume of an item# theless each incremental volume should cost.

a. Cheaper by the do9enb. Econoies of scalec. Anticipationd. 2ncreasing returns

16. The surplus productivity principle recogni9es the four agents of production#which are

a. and# buildings# other land improvements and machineryb. Plant# machinery# e$uipment and technologyc. #and% labor% capital and entrepreneurshipd. and# buildings# labor and capital

163. 2n any enterprise# labor must be paid ,rst# with capital paid after that#entrepreneurship is then paid. The residual income is attributed to the land =includingbuildings>. This concept is applies in what economic principle a4ecting valuesI

a. Economies of scaleb. Contributionc. alanced. Surplus productivity

116. This term means coordination or management.a. Capitalb. aborc. Entrepreneurshipd. Production

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111. This comparative approach considers the sales or o4ers of similar orsubstitute properties and related mar&et data# and establishes a value estimate byprocesses involving comparison.

a. Market data approachb. 2ncome approachc. Cost approach

d. evelopment techni$ue

11!. The process of orchestrating land# labor# and capital to produce an item.a. Conductionb. Analysisc. Entrepreneurshipd. Capitali9ation

11'. The forces that impact real estate values are the following@a. Physical# economical# sociological and physiologicalb. Population# income level# s&ill levels and social environc. Social% econoic% physical or environental and governentald. Political# economical# governmental and physical

11(. These forces relate to trends in society or culture# and sometimes these forcesare imagined while at other times they are based on actual facts and ,gures.

a. Environmentalb. overnmentalc. Physicald. Social

11). A * An KKKKKKKKKKKKKKKKKKKKKK is a group of complementary land uses.a. Loneb. Areac. 3eighborhoodd. 7unicipality

11-. 2n the application of this techni$ue to estimate value# the building value isestimated as the present value of the residual income attributable to the building ofan income producing property.

a. Building residual techni4ueb. and residual techni$uec. Property residual techni$ued. evelopment techni$ue

110. The term used to describe the connecting of complementary uses to thehomogenous land uses =9one> is

a. linkage.b. road networ&.c. Passage.

d. right/of/way.

11. Feighborhoods and 9ones ali&e generally e%ist in one of four life cycle stages+these are J

a. growth# stability# renovation# and rebirthb. growth# decline# reconstruction# and revitali9ationc. gro+th% stability% decline% and revitali*ation.d. growth# stability# decline and rebuilding

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113. These are assets that embody a cultural# historic# and* or architecturalheritage.

a. Agricultural propertiesb. 0istoric propertiesc. Trade related properties

d. Public sector assets

1!6. The initial stage in a neighborhood or 9one:s life cycle. This refers to theperiod in which the neighborhood or 9one is e%panding and developing.

a. Revitali9ationb. eclinec. Stabilityd. )ro+th

1!1. 8hen a neighborhood can no longer compete with other comparableneighborhoods# it usually enters the KKKKKKKKKKKKKKKKK stage of its life cycle.

a. Revitali9ationb. "eclinec. Stabilityd. rowth

1!!. The act of distinguishing or delineating mar&ets that the appraiser shouldconsider in his data program is called

a. mar&et segregation.b. mar&et analysis.c. arket segentation.d. mar&et study.

1!'. 2n this type of mar&et# goods and services are not readily produced or easilytransferable# with no readily identi,ed group of buyers and sellers active in aparticular mar&etplace.

a. E"cient mar&etb. !ne2cient arketc. uyer:s mar&etd. Seller:s mar&et

1!(. The study of a speci,c mar&et. 2t is the collection and dissection of data andthe conversion of that data to information that can be used for analysis and decision/ma&ing by an appraiser or analyst.

a. 7ar&etability studyb. Beasibility studyc. Market analysisd. 2nvestment analysis

1!). A rate of return used to convert a monetary sum# payable or receivable in the

future# into present value. Theoretically it should re


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1!-. The three types of mar&et analysis are@a. Market study% arketability study and feasibility studyb. 7ar&et data approach# sales comparison approach and o4ersc. 2nvestment analysis# economic base analysis# monetary analysisd. Statistical study# mar&et study and demographics study

1!0. The analysis of an environment of buyers*sellers and*or landlords*tenants=lessors*lessees>.a. 7ar&etability studyb. Beasibility studyc. Market studyd. 2nvestment analysis

1!. Type of mar&et analysis that addresses the time re$uired to absorb aparticular product# and the price or rent level at which that product would beaccepted into the mar&etplace.

a. Marketability studyb. Beasibility studyc. 7ar&et studyd. 2nvestment analysis

1!3. A KKKKKKKKKKKK study is simply a comparison of cost versus the value if thepro;ect is underta&en.

a. 7ar&etability studyb. 'easibility studyc. 7ar&et studyd. 2nvestment analysis

1'6. A study underta&en for the purposes of development and investment# theevaluation of investment performance# or the analysis of a transaction involvinginvestment properties.

a. Economic base studyb. 7ar&et studyc. Beasibility studyd. !nvestent analysis

1'1. A mortgage secured by a group of properties or a number of lots.a. Blanket ortgageb. Simple mortgagec. eind. 7echanic:s lien

1'!. 2f the contract rent and the mar&et rent are e$ual# the easehold or essee:s2nterest is KKKKKKKKKKKKKKK# assuming there is no leasehold improvement.

a. Positive leaseb. Fegative lease

c. 5erod. alanced

1''. This comparative approach to value involves the cost of ac$uiring e$uivalentland and constructing an e$uivalent new structure.

a. 7ar&et data approachb. Cost approachc. 2ncome approach

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d. uilder:s method1'(. 2n operating lease# the value of the essee:s 2nterest is estimated as the

present valuea. of rental payment for remaining life of the lease agreementb. of rental gain or loss and the value of the leasehold iproveent% if

any

c. of rental payment plus reversion value of the property at the end of the leaseagreementd. of rental gain or loss plus reversion value of the leasehold improvement# if any

1'). A KKKKKKKKKKKKKKKKKKKKK leasehold interest is created when the contract rent ishigher than the current mar&et rent.

a. Positiveb. E$ualc. Lerod. 3egative

1'-. A group of homogenous land uses.a. "istrictb. Feighborhoodc. Cityd. 7unicipality

1'0. Typically a factor produced by two components# which re.

a. Comparable datab. Elements of comparisonc. ,nits of coparisond. Physical characteristics

1'. The cost to create a virtual replica of the e%isting structure# employing thesame design and similar building materials.

a. Replacement cost# newb. nit/cost/in/place methodc. Guantity survey methodd. Reproduction cost% ne+

1'3. The current cost of a similar new item having the nearest e$uivalent utility asthe item being appraised.

a. Replaceent cost% ne+b. nit/cost/in/place methodc. Guantity survey methodd. Reproduction cost# new

1(6. An asset which has a similar function and e$uivalent productive capacity tothe asset being valued# but of a current design and constructed or made usingcurrent materials and techni$ues.

a. Replacement assetb. Reproduced assetc. Modern e4uivalent assetd. Public sector asset

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1(1. The process of ad;usting the replacement cost to re


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1(. 7ethod of estimating the reproduction cost or replacement cost that involvesthe ad;ustment of the original costs to current costs by a multiplier derived frompublished cost inde%es.

a. nit/in/placeb. Comparativec. Guantity survey

d. !nde$ or trending

1(3. Type of lease which involves the transfer ownership from lessor to lessee.a. ?perating leaseb. 'inancing leasec. eased feed. easehold fee

1)6. ose in property value are caused by deterioration or obsolescencea. "epreciationb. eferred maintenancec. Cost to cured. Replacement cost

1)1. The di4erence between the cost to reproduce or replace a property and itspresent value

a. Replacement costb. Cost to curec. "epreciationd. Regression

1)!. 7a;or causes of depreciation are the following e%cepta. "eferred aintenanceb. Physical deteriorationc. Bunctional obsolescenced. E%ternal obsolescence

1)'. Refers to the wear and tear from regular use and the impact of the elementsa. Physical deteriorationb. Bunctional obsolescencec. E%ternal obsolescenced. Adverse mar&et condition

1)(. 7ethod of estimating reproduction or replacement costs by applying theaverage or typical comparative cost =per s$uare/meter cost> of similar improvements.

a. Guantity survey methodb. nit/in/place methodc. Coparative ethodd. 2nde% or trending method

1)). This cost estimate envisions constructing a structure of comparable utility#employing the design and materials that are currently used in the mar&et.

a. Reproduction costb. Replaceent costc. Guantity survey methodd. nit/in/place method

1)-. The period of time over which improvements contribute to property value.

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a. seful lifeb. Econoic lifec. Remaining lifed. ifespan

1)0. ose in value caused by a


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1-(. Sometimes called historical age or chronological age# is the number of yearsthat have elapsed since building construction was completed.

a. E4ective ageb. Actual agec. Remaining useful life

d. Remaining economic life

1-). A method of estimating the reproduction cost or replacement cost thatinvolves a complete cost itemi9ation of all direct and indirect cost to be incurred orincurred in the construction of an improvement.

a. 2nde% methodb. Cost/in/place methodc. 7uantity survey ethodd. Comparative method

1--. Primarily used to allocate a &nown amount of total depreciation# estimated byeither the mar&et e%traction method or the age/life method# into its components

a. Component methodb. 7ar&et e%traction methodc. Age/life methodd. Breakdo+n ethod

1-0. The process of retiring a mortgage or debt over a speci,ed time period.a. ebt serviceb. 2nstallmentc. Aorti*ationd. E$uity

1-. Represents the money earned for the right to use capital.a. E$uityb. Amorti9ationc. !nterestd. Principal amount

1-3. Also &nown as debt service.a. Amorti9ationb. E$uityc. 2nstallmentd. Payent

106. Credit regulation devices that the ang&o Sentral ng Pilipinas can use toregulate the supply of money.

a. ending rates and amorti9ation ratesb. Capitali9ation rates and mode of paymentsc. "iscount rates and reserve re4uireents

d. Production of new bills and disposal of old bills

101. The government:s management of revenues =ta%es> and e%penses=appropriations> is called

a. monetary policyb. &scal policyc. repayment policyd. credit policy

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10!. The Philippines: ,scal policy is managed by thea. ang&o Sentral ng Pilipinasb. "epartent of 'inancec. epartment of udget and 7anagementd. epartment of Dustice

10'. The estimated amount for which a property# or space within a property# shouldlease on the date of valuation between a willing lessor and a willing lessee onappropriate lease terms in an arm:s/length transaction# after proper mar&etingwherein the parties had each acted &nowledgeably# prudently# and withoutcompulsion

a. Contract rentb. Market rentc. Rental rated. eased fee

10(. Binancial vehicles with traditional maturities or investment periods of less thanone year.

a. Capital mar&etsb. Cash depositsc. Time depositsd. Money arkets

10). 2n the income approach to value# reconstructed operating statements specifythat the income pro;ection is sub;ect to the assumption that the property is run by a *an

a. e%pert competent management.b. average copetent anageent.c. ine"cient operator.d. substandard management.

10-. Binancial vehicles with usual maturities of more than one year.a. Capital arketsb. Cash depositsc. Time depositsd. 7oney mar&ets

100. 2n this techni$ue the land value is estimated as the present value of theresidual income attributable to the land of an income producing property.

a. uilding residual techni$ueb. evelopment techni$uec. #and residual techni4ued. iscounted cash


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a. ?perating statements supplied by clientb. ?perating statements supplied by agent of clientc. 6perating stateents reconstructed by the appraiserd. ?perating statements reconstructed by the internal auditor

16. The process of converting an income stream into value.

a. Capitali*ationb. 2nvestment analysisc. 7ar&et analysisd. epreciation

11. The resulting amount of reducing the annual potential gross income by avacancy allowance amount.

a. ross pro,tb. Fet operating incomec. E4ective net incomed. E/ective gross incoe

1!. ?perating e%penses are deducted from the e4ective gross income todetermine the

a. annual net operating incoe for the property.b. annual net pro,t for the property.c. annual gross pro,t for the property.d. annual depreciation of the property.

1'. Process of converting income into value by dividing a single year:s stabili9ednet operating income# by an all/ris&s rate.

a. Nield capitali9ationb. iscounted cash


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10. 2n the application of the discounted cash


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13(. The rate that e$uates the present value of the net cash


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PART 2: PROFESS$ONAL PRACT$CE

1. 2f a property:s net income ratio is 6.6# what is its operating e%pense ratioIa. 6.6!b. !.6c. 6.6d. :.;:

!. An o"ce building was recently sold for P-6#666#666. iven the following information@ross potential income @ P1!#666#6665acancy factor @ 16E%penses @ () of e4ective gross incomeAnnual mortgage payment @ P(#)66#666E$uity @ P1!#)66#6668hat is the e$uity dividend rate or cash/on/cash rate of returnI

a. 0.(b. 1!.66

c.


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d. ?.?:>

(. 2f the land value in a subdivision has increased by 1! during the past year and theaverage price of land sold last year was P 1#)-6#666# what is the average price ofland sold todayI

a. P 1#'0!#66

b. P 1#01-#666c. P 1#)0!#)66d. P


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meter of the


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10. 7r. owns a parcel of land leased to 7r. C at an annual rental rate of P1#666#666.The lease has a remaining life of - years. 8hat is the present value of the rentals ifthe interest rate is 16 per yearI Present worth factor for annuity is (.'))!- andlump sum is 6.)-((0.

a. P %==%;:b. P '#'-#!6

c. P 1#001#)0'd. P 1#001#)-1

1. A building was constructed 16 years ago and is well/maintained that based on theobservation of the appraiser its condition is similar to other -/year/old buildings. Thee4ective age of the building is

a. 16 yearsb. ( yearsc. yearsd. 1- years

13. A building was constructed 16 years ago and is well/maintained that based on theobservation of the appraiser its condition is similar to other -/year/old buildings. Theactual age of the building is

a. I

a. P 0!#666#666b. P %:::%:::c. P 6#666#666d. P 0)#666#666

!1. A 16/year/old building is currently valued at P0#!66#666. 8hat was its original value ifit has appreciated by -6 since it was builtI

a. P (#'!6#666b. P !#6#666c. P %=::%:::d. P )#1(!#366

!!. The appropriate ad;ustment for time is determined to be per year. The timead;ustment for a comparable property that was sold a year ago for P16#666 pers$uare meter is

a. ess P 66 per s$uare meterb. Plus P 1#666 per s$uare meter

c. Plus P D:: per s4uare eterd. ess P 1#666 per s$uare meter

!'. A lessee is renting a commercial space with a base rent of P0#666 per month plus )of the gross sales e%ceeding P166#666 per month. The lessee:s gross sales last yearwas P1#-66#666. Qow much rent was paid last yearI

a. P 1(#666b. P


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c. P (#666d. P 11(#666

!(. A '6/year mortgage covering 0) of property value can be obtained from a ban& for.). The mortgage constant is 6.63!. E$uity for this type of property re$uires 1!return.

a. 3.66b. ?.?:>c. 16.66d. 16.)6

!). 8hat would be recapture rate of a building having a remaining economic life of 1!

years Ja. 11!b. c. D.>d. .66

!-. 2n a property residual capitali9ation approach# what is the value of an improved

property with a net income of P16#666 a year# an interest rate of and arecapture rate of !I

a. Pd. --

!. A vacant lot is rented for a car display for P!(#666 per month. The interest rate

applicable to this type of property is . Compute the value of the property by

income approach.a. P!#(66#666b. P!#-66#666c. P!#66#666d. P%::%:::

!3. 2f a particular buyer re$uires a recapture of the building portion of the price in '6

years# what is the indicated recapture rate of the buildingIa. 'b. '

c. d. '

'6. 7r. A is leasing a -6/s$uare meter commercial space for P'#666 per s$uare meter peryear. Research indicate that similar space have a going mar&et rate of P'#!66 pers$uare meter per year. 8hat is the rental gain reali9ed by 7r. A per yearI

a. P 1#!66b. P 1!#666

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c. P ;%::d. P !(#666

'1. A house and lot is priced at P#66#666. The lot alone is valued at P1#-)6#666. 8hatpercentage of the total as&ing price is attributable to the value of the lotI

a. 1.)

b. 13.6 c. d. 1

'!. A property with an annual net income of P''-#666 was sold for P(#!66#666. Theremaining life of the building is (6 years. and value is P1#!66#666. 8hat is theoverall rate for the propertyI

a. -.66b. 0.66c. D.::>d. 3.66

''. A comparable land was sold a year ago for P'6#666 per s$uare meter. 2ts location isconsidered 1) inferior and its shape and topography is 16 superior to the sub;ectsite. The time ad;ustment is ' per year. etermine the ad;usted sale price of thecomparable site.

a. P !3#(66 per s$uare meterb. P ;%:: per s4uare eterc. P '6#-66 per s$uare meterd. P '#(66 per s$uare meter

'(. A property with an annual net operating income of P''-#666 was sold for P(#!66#666.The remaining life of the building is (6 years. and value is P1#!66#666. 8hat is thevalue of the buildingI

a. P %:::%:::b. P !#666#666c. P !#)66#666d. P '#)66#666

'). A property was sold for P-6#666#666. sing the rule/of/thumb of building/to/land ratioof (@!# what is the value of the buildingI

a. P !6#666#666b. P '6#666#666c. P :%:::%:::d. P )6#666#666

'-. A 16/year old residential apartment has a reproduction cost of P-#!)6#666# bro&endown into P !#)66#666 representing the structural component# and P '#0)6#666 forthe other component . Nearly allowance for ordinary structural deterioration is !#while the depreciation rate for the curable component is ) per year. Economicobsolescence result in a rental loss of P-6#666 per year. 8hat is the estimated value

of the buildingIa. P )#1)6#666b. P '#0)#666c. P %;@=%:::d. P '#00)#666

'0. A comparable property sold si% months ago for P1#!)6#666. 7ar&et investigationindicates the following@

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ocation ad;ustment @ O)Time ad;ustment @ O-Age ad;ustment @ /0iven the above information# what is the indicated value based on the comparablepropertyI

a. P1#!'!#!)6

b. P


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uilding 5alue @ P)6#666#666Fet ?perating 2ncome @ P#')6#666uilding Capitali9ation Rate @ 1(and Capitali9ation Rate @ 3

('. 8hat is the residual income to the landIa. P


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c. P -6#666d. P 116#666

(. 8hat is the ad;ustment for type of constructionIa. P 16#666b. P 1!6#666

c. P -6#666d. P ?:%:::

(3. 8hat is the ad;ustment for no. of bedroomsIa. P =:%:::b. P -6#666c. P 1!6#666d. P (6#666

)6. 8hat is the estimated value of the property assuming the data have e$ualimportanceI

a. P 1#()1#666b. P

rea mock examination with answer

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