Ch.16-Test Problems-pg451 - 6. Which of the following...

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Chapter 16: Commercial Mortgage Types and Decisions Robb Page 06-Apr-2010 FIN 497: Real Estate Principles Professor Clements Test Problems – page 451. 1. Due-on-sales clauses are included in commercial mortgages primarily to protect lenders from: b) Default risk 2. Consider a 30-year, 7% fixed-rate, fully amortizing mortgage with a yield maintenance provision. Relative to this mortgage, a 10-year balloon mortgage with the same interest rate and yield maintenance provisions will primarily reduce the lender’s: a) Interest rate risk 3. Lockout provisions are primarily intended to reduce the lender’s: c) Reinvestment risk 4. The tax-benefits associated with installment sales are: b) Captured exclusively by the seller 5. Which of the following statements is most accurate? b) Joint ventures decrease the amount of equity capital the developer/borrower must invest in the project.
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Unformatted text preview: 6. Which of the following financing structures provides for 100 percent financing? d) Complete (land and building) sale-leaseback 7. Using financial leverage on a real estate investment can be for the purpose of all of the following except: d) Reduction of financial risk for the leveraged investment. 1 Chapter 16: Commercial Mortgage Types and Decisions 8. Which of these ratios is an indicator of the financial risk for an income property? d) Both a and b , but not c 9. If the propertys NOI is expected to be $22,560 operating expenses $12,250, and the debt service $19,987, the debt coverage ratio (DCR) is approximately equal to: b) 1.13 10. With a mezzanine loan: c) The borrowers promise to pay is secured by the equity interest in the borrowers limited partnership or limited liability company. 2...
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This note was uploaded on 04/25/2010 for the course FIN 497 taught by Professor Clements during the Spring '10 term at University of Missouri-Kansas City .

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Ch.16-Test Problems-pg451 - 6. Which of the following...

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