300 REVIEW QUESTIONS CHAPT 7.docx

1\. The three approaches to stratification and location analysis in mass appraisal are \_\_\_\_\_\_\_\_\_\_, \_\_\_\_\_\_\_\_\_\_, and \_\_\_\_\_\_\_\_\_\_. - a\) Regional segmentation, cluster analysis, neighborhood zoning - b\) Cluster analysis, geographical stratification, global model with...

1\. The three approaches to stratification and location analysis in mass appraisal are \_\_\_\_\_\_\_\_\_\_, \_\_\_\_\_\_\_\_\_\_, and \_\_\_\_\_\_\_\_\_\_. - a\) Regional segmentation, cluster analysis, neighborhood zoning - b\) Cluster analysis, geographical stratification, global model with location adjustments - c\) Property class analysis, functional zoning, geographical market calibration - d\) Zoning analysis, property classification, geographical boundaries Answer: b) Cluster analysis, geographical stratification, global model with location adjustments Explanation: These are the three main approaches used to segment properties based on location and similarity to ensure accurate mass appraisal and value adjustments. 2\. \_\_\_\_\_\_\_\_\_\_ analyses can be very effective for homogenous properties. - a\) Per-unit - b\) Sales comparison - c\) Income approach - d\) Discounted cash flow Answer: a) Per-unit Explanation: Per-unit analysis is most effective for homogeneous properties, where similar units, such as square footage or lot size, can be consistently applied across multiple properties. 3\. A statistical technique used for estimating unknown data based on known and available data is \_\_\_\_\_\_\_\_\_\_. - a\) Factor analysis - b\) Regression imputation - c\) Multiple regression analysis - d\) Market segmentation Answer: c) Multiple regression analysis Explanation: Multiple regression analysis uses known data to estimate values of unknown variables, a crucial method for property value prediction in mass appraisal. 4\. The formula of the sales comparison model is \_\_\_\_\_\_\_\_\_\_. - a\) MV = Sc + ADJc - b\) MV = b0 + (b1 x X1) + (b2 x X2) - c\) MV = GQ x \[(P1 x Q1) + (PL x QL)\] + OA - d\) MV = Sc + (PL x OA) Answer: a) MV = Sc + ADJc Explanation: The sales comparison model formula is expressed as MV = Sc + ADJc, where Sc represents the sale price, and ADJc represents the adjustments made for property differences, which is a common method used in mass appraisal. 5\. The three basic types of mass appraisal model structures are \_\_\_\_\_\_\_\_\_\_, \_\_\_\_\_\_\_\_\_\_, and \_\_\_\_\_\_\_\_\_\_. - a\) Quadratic, linear, polynomial - b\) Additive, multiplicative, hybrid (generic) - c\) Exponential, logarithmic, parabolic - d\) Recursive, matrix, additive Answer: b) Additive, multiplicative, hybrid (generic) Explanation: These are the three primary model structures that account for how property characteristics interact in determining value. 6\. MVs = b0 + (b1 x X1) + (b2 x X2) + (b3 x X3) is known as the \_\_\_\_\_\_\_\_\_\_ model. - a\) Multiplicative - b\) Additive - c\) Logarithmic - d\) Regression Answer: b) Additive Explanation: This is the standard form of an additive model, where the variables (X1, X2, X3) are added after being multiplied by their respective coefficients (b1, b2, b3). 7\. When geographically stratifying properties, \_\_\_\_\_\_\_\_\_\_ should be drawn to correspond with \_\_\_\_\_\_\_\_\_\_ or political boundaries. - a\) Submarket lines, zoning regulations - b\) Boundaries, physical - c\) Value lines, tax boundaries - d\) Economic divisions, property lines Answer: b) Boundaries, physical Explanation: When stratifying properties geographically, boundaries should align with physical or political features to ensure consistent market segmentation. 8\. Broad geographic areas subject to the same economic influences are known as \_\_\_\_\_\_\_\_\_\_. - a\) Submarkets - b\) Market areas - c\) Geographical zones - d\) Economic units Answer: b) Market areas Explanation: Market areas are broad regions where properties are influenced by similar economic factors, affecting their valuation similarly. 9\. A technique that can be used to group similar subdivisions into neighborhoods is \_\_\_\_\_\_\_\_\_\_. - a\) Principal component analysis - b\) Cluster analysis - c\) Geospatial mapping - d\) Boundary alignment Answer: b) Cluster analysis Explanation: Cluster analysis is a statistical method used to group properties or subdivisions with similar characteristics into neighborhoods. 10\. MV = GQ x \[(P1 x Q1) + (PL x QL)\] + OA is known as the \_\_\_\_\_\_\_\_\_\_ model. - a\) Additive - b\) Multiplicative - c\) Hybrid (generic) - d\) Linear regression Answer: c) Hybrid (generic) Explanation: This is the hybrid (generic) model that combines elements from both additive and multiplicative models to estimate market values. 11\. The trial and error process for quantifying the relationship between dependent (sale price) and independent variables (property characteristics) is the \_\_\_\_\_\_\_\_\_\_. - a\) Regression estimation process - b\) Adaptive estimation procedure - c\) Market correlation method - d\) Factor analysis Answer: b) Adaptive estimation procedure Explanation: The adaptive estimation procedure is a trial-and-error method used to fine-tune relationships between sale prices and property characteristics. 12\. In the development of per-unit values, the most appropriate units would have low measures of \_\_\_\_\_\_\_\_\_\_. - a\) Dispersion - b\) Variability - c\) Skewness - d\) Coefficients Answer: a) Dispersion Explanation: Low measures of dispersion indicate that the per-unit values are consistent and stable, making them reliable for mass appraisal purposes.