If All Appraisal Methods Are Appropriate for Use in Valuing

question 13

Multiple Choice

If all appraisal methods are appropriate for use in valuing a particular property, there is a clear order of preference that real estate professionals adhere to. Which of the following depicts the preferred order, with the most preferable approach being listed first and the least preferable listed last?

• A) Sales comparison approach, cost approach, income approach
• B) Income approach, Sales comparison approach, cost approach
• C) Cost approach, income approach, sales comparison approach
• D) Sales comparison approach, income approach, cost approach

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Definitions:

Yield To Maturity

The total return expected on a bond if held to its maturity date, taking into account its current market price, interest payments, and face value.

Par Value

The face value of a bond or a stock, representing the amount that will be paid back at maturity for bonds or the nominal value of a stock.

Catastrophe Bond

A high-yield debt instrument designed to raise funds for companies in the insurance industry to cover the risk of natural disasters.

Seine River

A historic river that flows through the heart of Paris, France, and is known for its cultural and economic significance.