Deck 13: The Role of Real Assets

Question 1

Classical characteristics of land include all of the following except

A) it is immobile
B) it is fungible
C) it is indestructible
D) it is non-income producing

Answer 1

it is fungible

Question 2

Which of the following is a financial asset?

A) Gold bar
B) Stock certificate
C) Automobile
D) Office building

Answer 2

Stock certificate

Question 3

Which of the following is a real asset?

A) Corporate bond
B) Government bond
C) Twenty dollar bill
D) Computer

Answer 3

Computer

Question 4

______ property is a legal interest in real estate.

A) Personal
B) Proprietary
C) Financial
D) Real

Question 5

Which of the following is a characteristic of a financial asset?

A) It has a corresponding liability
B) It produces income
C) It usually shows price appreciation
D) It usually generates no income

Question 6

The majority of institutional landowners are looking for

A) annual cash flows
B) long-term price appreciation
C) short-term price appreciation
D) a mix of annual cash flows and long-term price appreciation

Question 7

Of their investments in real estate, pension funds have about ____ of their money in timberland.

A) 2%
B) 4%
C) 8%
D) 12%

Question 8

Usual motivations for timberland investment include all of the following except

A) regulatory defense
B) collateral
C) pure investment
D) strategic investment

Question 9

State governments with large investments in timberland are

A) California and New Hampshire
B) Missouri and Maine
C) Alabama and Texas
D) Pennsylvania and New Jersey

Question 10

Growing trees are called

A) land stands
B) stumpage
C) wood on the hoof
D) volume land

Question 11

Conditions that make a section of land different than the surrounding terrain are called

A) biological factors
B) fungibility factors
C) microsite factors
D) acquisition factors

Question 12

A trained forest appraiser knows to look for forests undergoing

A) a species shift
B) a micro site shift
C) mutual canopy support
D) a product class shift

Question 13

Timberland losses due to fire, insects, and disease total less than _____ per year.

A) 0.2%
B) 2%
C) 5%
D) 10%

Question 14

Clear-cutting may be appropriate if a forest depends on

A) river drainage
B) mutual canopy support
C) wetland waterfowl
D) animal grazing

Question 15

A significant inhibition to timberland investment has historically been

A) the lack of a standard timberland index
B) adverse Internal Revenue Service rulings
C) high commission costs
D) inability to generate income

Question 16

One study indicates that the correlation coefficient between timberland and the S&P500 index is about

A) -.50
B) 0
C) .50
D) .95

Question 17

A common motivation for the purchase of gold is

A) income generation
B) tax advantages
C) the security it provides
D) a substitute for equity securities

Question 18

The price of gold is fixed daily in

A) Budapest
B) Washington, D. C.
C) Amsterdam
D) London

Question 19

The largest percentage of privately held gold is in

A) France
B) United States
C) India
D) Saudi Arabia

Question 20

Which of the following is generally not a driving force behind gold price movements?

A) Inflation
B) The strength of foreign currencies
C) Supply
D) Demand

Question 21

The primary advantage of gold certificates is

A) convenience
B) tax reasons
C) added income producing ability
D) added security against corporate default

Question 22

For a U. S. coin in circulation, which of the following is usually highest?

A) Numismatic value
B) Intrinsic value
C) Popular value
D) Fiat value

Question 23

Which of the following is not an official gold coin issued by a government?

A) South African Krugerrand
B) Canadian Maple Leaf
C) Congolese Harmonica
D) Chinese Panda

Question 24

Land is widely considered to be a

A) mobile investment
B) long-term investment
C) fungible investment
D) financial asset

Question 25

Which of the following is not a way to invest in gold?

A) Bullion
B) Gold ADRs
C) Gold certificates
D) Shares in gold mining companies