The Normal Method to Reach a Final Estimate of Value

question 3

Multiple Choice

The normal method to reach a final estimate of value in a narrative appraisal is

• A) an adjusted average of the approaches to value as determined by the judgment of the appraiser.
• B) whatever value is shown by the major approach.
• C) a mathematically determined average of all approaches.
• D) only the capitalized value as determined by the current market rate of return.

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Definitions:

Interest Rate

The part of a loan that is added as interest for the borrower, normally expressed as an annual percentage of the existing loan balance.

Reserve Ratio

The reserve ratio is the fraction of total deposits that a bank is required to hold in reserve and not loan out, acting as a regulatory tool to ensure the stability of the banking system.

Bank Reserves

Funds that banks hold to meet immediate withdrawal demands and regulatory requirements.

Money Supply

The total amount of money—coins, currency, and bank deposits—circulating in an economy.