When an Appraiser Has a Property to Evaluate, Which of the Following

question 25

Multiple Choice

When an appraiser has a property to evaluate, which of the following would he need to know first?

• A) Comparable properties
• B) Amount of his fees
• C) Assessed valuation
• D) Highest and best use

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Definitions:

Risk Free Interest Rate

The theoretical rate of return on an investment with zero risk, typically represented by the yield on government bonds.

Exercise Price

The exercise price is the specified price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Binomial Model

A mathematical model used in finance to estimate the price of options by considering two potential outcomes for an asset's price (up and down) over time.

Risk Free Interest Rate

The rate of return on an investment with zero risk of financial loss, typically based on government bonds.