How would an unexpected increase in inflation affect the loss rates on property policies? a. Loss rates on property policies would remain the same. b. Loss rates on property policies would decrease. c. Loss rates on property policies would increase.
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How would an unexpected increase in inflation affect the loss rates on property policies?
Loss rates on property policies would remain the same.
Loss rates on property policies would decrease.
Loss rates on property policies would increase.
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- In general, what effect would a reduction in risk have on “going-in” cap rates? What would this effect be if it occurred at the same time as an unexpected increase in demand? What would the effect on property values be?Which of the following is the principal risk faced by a home equity lender? a. Interest rates in the economy may fall b.Home prices in the area may decline c.Interest rates in the economy may rise d.Home prices in the area may riseHow might a sudden decrease in people's expectations of future real estate prices affect interest rates? O A. Interest rates would increase because real estate would have a relatively lower rate of return compared to bonds, which would cause the demand for bonds to increase. B. Interest rates would increase because real estate would have a relatively higher rate of return compared to bonds, which would cause the demand for bonds to decrease. OC. Interest rates would decrease because real estate would have a relatively higher rate of return compared to bonds, which would cause the demand for bonds to decrease. O D. Interest rates would decrease because real estate would have a relatively lower rate of return compared to bonds, which would cause the demand for bonds to increase.
- For each of the factors listed below indicate whether the factor, independently, is likely to cause a particular income producing property to trade for a lower or higher CAP rate compared with an average property. For this question, no explanation is needed. Indicating “higher”, “lower” or “irrelevant” for factors a through g is sufficient. a. Lower volatility in rent prices and occupancy rates. b. Worse location c. High inflation environment d. High risk premium environment e. Market general higher than normal expected NOI growth f. Lower construction quality g. High quality tenantsdid real estate returns exceed the rate of inflation?If short - term rate - sensitivity asset - liability GAP is negative : a)Decrease in Interest Rate will result in increase in Net Interest Income b)Decrease in Interest Rate will result in decrease in Net Interest Income c)Profit will increase notwithstanding the movement in interest rate d)Profit will increase notwithstanding the movement in interest rate
- Consider the money market. What happens and why to interest rates during an economic expansion (e.g., a decrease in Y)? Go through the complete process in detail explaining in words.Which statement is true? Financing the property may not be beneficial to the owner in terms of yield on the equity investment O If the overall property yield equals the mortgage rate, the owner receives an additional yield on her or his investment by trading on the equity O If the overall yield on the property is less than the mortgage rate, favorable leverage occurs O When negative leverage occurs, the owner receives a cash yield on the property that is greater than if the property were not financedD4) What is absorption? What is positive absorption? What is negative absorption? When evaluating whether to rent or buy, a key indicator used to gauge the market is property listings. What does an increase in property listings tell us? What does a decrease in property listings tell us?
- 2. How might a sudden increase in people's expectations of future real estate prices affect interest rates?What is the time horizon for earning a return on different types of investments? What are the tax Implications of different investment strategies? What is the impact of inflation on investment retums? How can diversification help to maximize investment eamings? What are the fees and expenses associated with different investment options and how do they impact earnings?How will a decrease in time preferences affect the loanable funds market? A. There will be an increase in the supply of loanable funds. B. There will be a decrease in the supply of loanable funds. C. There will be an increase in the demand of loanable funds. D. There will be a decrease in the demand of loanable funds.
