Statements regarding equity

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1. Which of the following is true?

a. CPI adjustments shift the risk of unexpected inflation is shifted to the lessor

b. Expense stops shift the risk of increases in expenses to the lessee while allowing the lessee to retain the benefit of any decrease in expenses

c. The use of a CPI index in lease contracts shifts risk to the lessee

d. Expense stops protect the lessee from unexpected changes in market rents

2. Which of the following statements regarding equity is TRUE?

a. The amount of equity an investor has in a property may change over time if the property value and loan balance changes

b. The amount of equity an investor has in a property depends on the value of the equity the investor has in his or her other investments

c. The outstanding balance on loan on the property does not affect the amount of equity an investor has in the property

d. All of the above

Reference no: EM131875967

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