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California Real Estate practice exam

Number of questions: 30

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1) Under the Federal Truth-in-Lending Law, two of the most critical facts which must be disclosed to buyers or borrowers are:
  1. duration of the contract and discount rate
  2. finance charge and annual percentage rate
  3. carrying charge and advertising expense
  4. installment payments and cancellation rights
 2) In a legal sales contract, the seller is often referred to as the:
  1. divisor
  2. donor
  3. vendor
  4. trustor
 3) A loan to be completely repaid, principal and interest, by a series of regular equal installment payments is a:
  1. straight loa
  2. balloon payment loa
  3. fully amortized loa
  4. variable rate mortgage loa
 4) A person holding title to real property in severalty would most likely have:
  1. a life estate
  2. an estate for years
  3. ownership in common with others
  4. sole ownership
 5) Tax delinquent real property not redeemed by the owner during the five-year statutory redemption period is deeded to the:
  1. city
  2. county
  3. state
  4. school district
 6) Governmental land use planning and zoning are important examples of:
  1. exercise of eminent domai
  2. use of police power
  3. deed restrictions
  4. encumbrances
 7) As used in real estate practices, the land of a riparian owner borders on:
  1. a river
  2. a stream
  3. a watercourse
  4. any of the above
 8) We call the instrument used to remove the lien of a trust deed from record a:
  1. satisfactio
  2. release
  3. deed of reconveyance
  4. certificate of redemptio
 9) A quitclaim deed conveys only the present right, title and interest of the:
  1. grantor
  2. servient tenement
  3. grantee
  4. property
 10) Parallel wooden members used to support floor and ceiling loads are called:
  1. rafters
  2. joists
  3. headers
  4. studs
 11) In a typical percentage lease, rent is calculated as a percentage of:
  1. assets of the lessee's business
  2. net sales of the lessee's business
  3. gross sales of the lessee's business
  4. net taxable income of the lessee's business
 12) Capitalization is a process whereby an appraiser:
  1. converts income into capital value
  2. determines depreciation reserves
  3. establishes cost of capital investment
  4. finds gross income of equity capital
 13) Which of the following is a lien?
  1. an easement
  2. a zoning restrictio
  3. an attachment
  4. all of the above are liens
 14) You are a California real estate broker. A prospect is referred to you by an out-of state broker and a sale is consummated by you. You want to split your commission with the cooperating broker. Under the California Real Estate Law:
  1. you may pay a commission to a broker of another state
  2. you cannot divide a commission with a broker of another state
  3. you can pay a commission to a broker of another state only if he is also licensed in California
  4. none of the above
 15) The position of trust assumed by the broker as an agent for a principal is described most accurately as:
  1. gratuitous relationship
  2. a trustor relationship
  3. a fiduciary relationship
  4. an employment relationship
 16) Of the following, which is the most important reason for a broker to maintain a trust fund account in addition to a regular business account?
  1. to provide a means of control over the destiny of transactions being negotiated
  2. it is easier from an accounting point of view
  3. the bank is responsible for any loss to the trust fund account resulting from embezzlement
  4. the consequence which could occur should legal action be taken against the broker
 17) The instrument used to secure a loan on personal property is called a:
  1. bill of sale
  2. trust deed
  3. security agreement
  4. bill of exchange
 18) An apartment complex cost $450,000. It brings in a net income of $3,000 per month. The owner is making what percentage of return on the investment?
  1. 7%
  2. 8%
  3. 11%
  4. none of the above
 19) A subordination clause in a trust deed may:
  1. permit the obligation to be paid off ahead of schedule
  2. prohibit the trustor from making an additional loan against the property before the trust deed is paid off
  3. allow for periodic renegotiation and adjustment in the terms of the obligatio
  4. give priority to liens subsequently recorded against the property
 20) A broker selling a property on which he holds an option should notify the purchaser that he is acting as:
  1. an optionor
  2. a mortgagor
  3. a beneficiary
  4. a principal
 21) Community property is property owned by:
  1. the municipality
  2. husband and wife
  3. churches
  4. the community
 22) Copies of all listings, deposit receipts, cancelled checks, and trust records must be retained by a licensed real estate broker for:
  1. one year
  2. two years
  3. three years
  4. five years
 23) A "loss of value from any cause" is a common definition of:
  1. economic obsolescence
  2. depreciatio
  3. principle of contributio
  4. adverse leverage
 24) An interest in real property may be acquired by either prescription or by adverse possession. The interest resulting from prescription is:
  1. the right to use another's land
  2. a possessory title
  3. an equitable interest
  4. a private grant
 25) Generally, the taking of private land by governmental bodies for public use is governed by due process of law and is accomplished through:
  1. exercise of the police power
  2. eminent domai
  3. reverter
  4. escheat
 26) The type of mortgage loan which permits borrowing additional funds at a later date is called:
  1. an equitable mortgage
  2. junior mortgage
  3. open-end mortgage
  4. equitable mortgage
 27) Joint ownership of real property by two or more persons, each of whom has an undivided interest (not necessarily equal) without right of survivorship, is:
  1. a tenancy in partnership
  2. a tenancy by entireties
  3. a tenancy in commo
  4. a leasehold tenancy
 28) Economic obscolecence could result from each of the following except:
  1. ew zoning laws
  2. a city's leading industry moving out
  3. misplacement of improvements
  4. an outdated kitche
 29) If a $54,600 investment in real estate generates gross annual earnings of 15%, the gross monthly return most nearly is:
  1. $819
  2. $705
  3. $685
  4. $637
 30) When a loan is fully amortized by equal monthly payments of principal and interest, the amount applied to principal:
  1. and interest remains constant
  2. decreases while the interest payment increases
  3. increases while the interest payment decreases
  4. increases by a constant amount

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