26. Real assets often increase in value when: A. higher levels of inflation are anticipated. B. the stock market is advancing. C. the public is confident about world events. D. bond prices are advancing.

27. Real assets may be effective for portfolio diversification because: A. they provide an effective hedge against deflation. B. they are perceived as a safe haven for investments. C. real and financial assets are less positively correlated than financial assets alone. D. None of the above

28. Compared to other investments, which of the following is not a disadvantage of investing in real assets? A. The initial amount of money is usually large B. The absence of a relatively efficient, liquid market C. High transaction and incidental costs D. All of the above are disadvantages

29. Real estate is a particularly good investment among real assets because of: A. depreciation write-offs. B. appreciation in value due to price appreciation. C. long-term financing. D. All of the above

30. Depreciation A. on residential real estate property can be written off over 31 1/2 years. B. on commercial real estate can be written off over 39 years. C. can be accelerated for commercial real estate. D. None of the above

31. Real assets in comparison to financial assets are more likely to produce: A. superior returns. B. high liquidity. C. psychic pleasure. D. deflationary benefits.

32. Which is not an approach to real estate valuation? A. Cost approach B. Comparative sales value C. Price-earnings ratio D. Income approach

33. In a(n) ____ arrangement, the borrower may end up making payments to cover not only the loan amortization, but also interest on deferred interest from an earlier period. A. Graduated payment mortgage B. Shared appreciation mortgage C. Adjustable-rate mortgage D. More than one of the above