ESTATE AND REAL ESTATE MARKETS
Test Problems
1. A market where tenants negotiate rent and other terms with property owners or their
managers is referred to as a:
b. User market
2. The market in which required rates of return on available investment opportunities are
determined is referred to as the:
d. Capital market
3. The actions of local, state, and federal governments affect real estate values
d. All of the above
4. Approximately what portion of U.S. households own their own home?
b. Approximately two-thirds
5. Of the following asset categories, which class has the greatest aggregate market value?
d. Real estate
6. Storm water drainage systems are best described as:
b. Improvements to the land
7. What is the single largest asset category, in terms of value, in the portfolio of the typical
U.S. household?
a. Real estate
8. Real estate markets differ from other asset classes by having all of the following
characteristics except:
d. Homogeneous product
9. Which of the following is not important to the location of commercial properties?
c. Access to schools
Study Questions
1. The term real estate can be used in three fundamental ways. List these three alternative
uses or definitions.
Solution: Real estate is most commonly defined as land and any improvements made to
or on the land, including fixed structures and infrastructure components. The term is also
used to describe the “bundle of rights” associated with the ownership and use of the
physical characteristics of space and location. Finally, real estate may be described as the