Exam 3: Central Place Theory and the System of Cities

What is the monthly payment on an $80,000, 9% interest-only mortgage?

You want to take out a fully-amortizing 30-year mortgage. You can afford monthly payments of $600 each. The interest rate is 9%. How much money can you borrow?

What is the present value of a 10-year lease with monthly rental payments of $2000 due at the beginning of each month, if the opportunity cost of capital is 8%?

Real estate is approximately what share of the total U.S. investable asset market universe:

You need to borrow $80,000 for a down-payment on a house. You would like to pay the loan off in 15 years. With 9% interest on the loan, what will be your monthly payment?

You buy a piece of land for $50,000. You think you will be able to sell it for three times this value in four years. Ignoring any net cash flow while you hold the land, what would be your return on this investment, stated in per annum terms with annual compounding?

Professional money managers have traditionally divided the investment universe into three major long-run investment "asset classes" plus "cash"). Which of the following is not one of these asset classes:

On Dec.31 2006 you buy a property for $1,000,000. On Dec.31 2007 that property yields $100,000 of net cash flow which you take and spend on a New Year's Eve bash. Also on Dec.31 2007 the property is appraised at $1,010,000 in value, but you don't sell it then. On Dec.31 2008 the property yields another $100,000 in net cash flow which you spend on another bash, in part to celebrate the fact that you sold the property that very day for $1,200,000. There are no other cash flows from this investment. A) What is the simple HPR total return on your investment in this property for the calendar year 2007? B) What is the simple HPR total return on your investment in this property for the calendar year 2008? C) What is the annual time-weighted arithmetic mean periodic total return for this property during the two-year period from the beginning of 2007 through the end of 2008? D) What is the annual time-weighted geometric mean periodic total return for this property during the two-year period from the beginning of 2007 through the end of 2008? E) What is the IRR per annum) on your investment in this property "cradle-to-grave" that is, over the entire 2-year period you held the property, from purchase to sale)?

Which statement is most accurate?

All of the following are advantages of direct ownership of property as a way of investing in real estate except:

All are true, except:

All are ways to break up or add up to) the total return except:

"Liquidity" refers to:

The nominal income return was:

The nominal appreciation return was:

You expect annual cash flows from a certain property as follows: Year 1 \ 20,000 Year 2 \ 22,000 Year 3 \ 30,000 Year 4 \ 31,000 Year 5 \ 40,000 In addition, you expect that you can sell the property at the end of the 5^th year for 10 times its expected cash flow that year. If the opportunity cost of capital is 10% per year, then what is the net present value NPV) of a deal in which the investor has to pay $350,000 for the property at the end of Year 0, one year prior to the first cash flow)?

The present value of the future sum of $30,000 two years from now, if the opportunity cost of capital is 15% nominal annual rate of return compounded monthly is:

If yields are quoted at 9.00% in the bond market BEY), then what interest rate must you charge in a monthly-payment mortgage MEY) in order to be able to sell the mortgage at par value in the bond market?

All of the following are examples of the "income objective" of investment except:

If you have a perpetuity from T=0 valued at PV=$1,000, and the same cash flow stream results in a perpetuity starting from T=3 valued at $500, how much is the annuity from T=0 until T=3 worth, assuming r=10%?