Although the Function of Commercial Brokerage Is the Same as That

question 9

Multiple Choice

Although the function of commercial brokerage is the same as that of residential brokerage, the activities of commercial brokers usually differ considerably from those of residential brokers due to fundamental differences in these two markets. All of the following statements regarding commercial brokerage are true EXCEPT:

• A) Relative to residential transactions, commercial transactions tend to be larger
• B) The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions.
• C) An important part of the commercial broker's service is to provide the prospective buyer with reports that enable him to complete due diligence for the property
• D) Commercial brokers are often required to lower their commission in order to negotiate compromises between buyers and sellers when they reach an impasse over price.

---

Definitions:

New Bonds

Securities that have been recently issued, representing loans from investors to issuers such as corporations or governments with a commitment to pay interest and return principal at specified dates.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents.

Average Collection Period

The average number of days it takes for a business to receive payment from its customers for invoices issued.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales by total assets.