1. A real estate broker is hired by a property owner to manage a residential

building. The broker is responsible for collecting rents, paying expenses,

maintaining records, and supervising repairs. The broker's compensation

is based on a percentage of the gross income of the property. This type of

arrangement is known as:

a) a net lease

b) a gross lease

c) a management contract*

d) a fiduciary agreement

Rationale: A management contract is an agreement between a property owner

and a manager who undertakes the operation and maintenance of the

property for a fee, usually a percentage of the gross income.

2. A real estate appraiser is hired by a lender to estimate the market value of a

property that is being offered as collateral for a loan. The appraiser uses

three approaches to value: the cost approach, the sales comparison

approach, and the income approach. The appraiser assigns the most

weight to the approach that:

a) is the most reliable and relevant for the type of property and market*

b) results in the highest value for the property

c) is the easiest and quickest to apply

d) is preferred by the client or intended user

Rationale: The appraiser should use professional judgment to determine