REAL ESTATE FINANCE
SAMPLE TEST
房地产金融代考 Discuss your recommendation in the context of the capitalization of income and discounted cash flow valuations of the property.
1.Calculate the remain principal balance outstanding after the 3rdmonthly payment has been made on a level pay mortgage with an initial principal balance of $10,000,000, an interest rate of 6.5% payable monthly in arrears and calculated on a 30/360 day basis and amortization on a 30-year schedule. 房地产金融代考
2.A property shows projected cash flows of $1,200,000, $1,275,000, $1,350,000and $1,450,000 over the next 4 years and a residual value in the 4th year of $22,000,000. Assuming that you believe the market capitalization rate to be 6% and the projected growth rate to be 2.5%, would you recommend the purchase of this property for $19,750,000? Discuss your recommendation in the context of the capitalization of income and discounted cash flow valuations of the property.
3.Given the following data for a real estate investment, please calculate the requiredreturn on investment and the capitalization rate of the property. 房地产金融代考
rf = 5%
σ = 0.85
σm = 1.0
ρ = .8
rm – rf = 6%
Growth rate = 2.5%
4.Discuss the capitalization rate of a property in the context of the Gordon Growth Model. 房地产金融代考
5.Given the following parameters of a fully call protected loan, calculate the value of the loan to a holder at the beginning of the 3rdloan year (i.e. immediately after the second annual loan payment has been made) utilizing as a base rate the yield on the weighted average life Treasury issue.
Initial Principal Amount: $17,500,000
Interest Rate: 7.00% payable annually in arrears Amortization: $1,250,000 per year
Term: 7 years 房地产金融代考
Equivalent term and risk adjusted spread: 2.50%
1-year Treasury Yield: 2.00%
3-year Treasury Yield: 3.00%
5-year Treasury Yield: 4.00%
10-year Treasury Yield: 5.00%
6.Discuss one advantage and one disadvantage of the capitalization of incomeapproach to valuation.
7.What is the difference in risk to a landlord between quoteing rental rates on a grossand triple net basis?
8.Assuming that you utilize data from the NCREIF Property Index to represent the estimated return on real estate in your portfolio allocation model, what realestate strategy should your allocation be invested in and why?
