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Question 1

The sales comparison approach is based on the economic principles of:

Options :

A : Efficient markets

B : Special financing and other terms regarding each sales transactions

C : Age of each property

D : Supply and demand

Answer: A,D

Question 2

Market evidence indicated that adjustable-rate preferred stocks generally required yields in the range of ______________ basic points.

Options :

A : 42 to 445

B : 48-498

C : 32-500

D : 50-500

Answer: A

Question 3

In measuring the business risk, for many companies, sales volatility is the most important determinant of the fluctuation of net income measured by the standard deviation. Although companies may have some control over annual sales volume, sales volatility is, to a considerable extent, a function of the:

Options :

A : Economy-s overall health

B : Operating leverage

C : Consumers' willingness to spend their disposable income

D : GDP

Answer: A,C

Question 4

Several factors influence __________________, particularly:

1. The proximity of the valuation date to the fiscal year-end

2. The quality of the interim statements

3. The importance of seasonality to the subject company

4. The extent to which information in interim statements is likely to affect the affect the conclusion

Options :

A : Usefulness of interim statements

B : Financial schedules

C : Federal tax returns

D : Audited statements

Answer: A

Question 5

____________ is perhaps the most difficult task for the business appraiser.

Options :

A : Getting two or more parties with different economic and business expectations to agree on projected future benefits and the risks associated with achieving those projections.

B : Identification of partial interest.

C : Selection of enterprise value premise.

D : Estimation of invested capital

Answer: A