Business Process Analysis Quiz Questions

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  • 1/148 Questions

    The communication process involves encoding an intended meaning into a message and the receiving and decoding of the message into perceived meaning?

    • True
    • False
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About This Quiz

A compilation of all the quiz questions as gathered by Chris Gilman; leader of the IFMA study group
Good luck with the exam!

Business Process Analysis Quiz Questions - Quiz

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  • 2. 

    Any measure that helps a facility manager understand service operations might be a metric.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    This statement suggests that any measure that provides insight into service operations can be considered a metric. This means that any data or information that helps a facility manager understand how well their facility is functioning in terms of service delivery can be classified as a metric. This could include data on customer satisfaction, response times, maintenance costs, or any other relevant performance indicators. Therefore, the statement is true.

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  • 3. 

    Which of the following would be a good example of virtualization?

    • A building automation system

    • Purchasing an automated system SaaS

    • Graphically depicting energy use in a building

    • Deploying a remote sensor network to monitor room occupancy

    Correct Answer
    A. Purchasing an automated system SaaS
    Explanation
    Purchasing an automated system SaaS (Software as a Service) would be a good example of virtualization. Virtualization in this context refers to the use of virtualized resources, where software and services are provided over the internet, rather than being physically installed or implemented on local hardware. SaaS allows users to access and use software applications without having to manage or maintain the underlying infrastructure.

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  • 4. 

    The risk matrix and similar tools are used primarily to?

    • Guide insurance pricing

    • Develop evacuation plans

    • Protect assets

    • Prioritize resources

    Correct Answer
    A. Prioritize resources
    Explanation
    The risk matrix and similar tools are used primarily to prioritize resources. These tools help organizations assess and evaluate risks, allowing them to allocate their resources effectively. By identifying and prioritizing risks based on their likelihood and impact, organizations can focus their attention and resources on addressing the most critical risks first. This helps in optimizing resource allocation and decision-making, ultimately enhancing the organization's ability to manage and mitigate risks.

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  • 5. 

    Of the following types of flooring what type would you recommend for installation in a commercial kitchen?

    • Commercial grade carpet that is easy to walk on

    • Linoleum which has a luster and never needs to be waxed

    • Non-slip quarry tile

    • Concrete which is easy to sweep and damp mop

    Correct Answer
    A. Non-slip quarry tile
    Explanation
    Non-slip quarry tile would be the recommended type of flooring for installation in a commercial kitchen because it provides a non-slip surface, which is important in an area prone to spills and moisture. This type of tile is designed to prevent accidents and ensure the safety of workers in a high-traffic environment like a commercial kitchen. Additionally, quarry tile is durable and able to withstand heavy foot traffic, as well as the wear and tear of kitchen equipment. Its resistance to stains and moisture makes it easy to clean and maintain, making it an ideal choice for a commercial kitchen setting.

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  • 6. 

    Which of the following statements best describes a business process analysis?

    • Shows the effect of disruption to an essential business activity

    • Identifies potential vulnerabilities at each stage of a business process

    • Highlights inefficiencies and redundancies in a sequential business activity

    • Outlines the inputs, outputs, and required resources of a business process

    Correct Answer
    A. Outlines the inputs, outputs, and required resources of a business process
    Explanation
    A business process analysis involves outlining the inputs, outputs, and required resources of a business process. This analysis helps to understand the flow of activities, identify the necessary resources, and determine the desired outcomes of the process. It focuses on mapping out the various steps involved in the process and ensuring that all necessary components are in place for its successful execution. This analysis is essential for streamlining and improving the efficiency of the business process.

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  • 7. 

    What information is most important in a charge back system?  (Choose two)

    • Information needed to explain charges

    • Information on corporate standards and accounting principles

    • Information that details casual relationships

    • Information that shows financial responsibility

    • Information that shows work responsibility

    Correct Answer(s)
    A. Information needed to explain charges
    A. Information that shows financial responsibility
    Explanation
    In a chargeback system, the most important information is the one needed to explain charges. This is crucial in order to understand why a chargeback is being requested and to determine its validity. Additionally, information that shows financial responsibility is also important as it helps in assessing the credibility and reliability of the party involved in the chargeback process. This information can include financial records, payment history, and evidence of financial transactions.

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  • 8. 

    In a multi-tenant office building, a private stairwell built between two floors occupied by one tenant is?

    • Part of the buildings common area

    • Part of the tenants rentable area

    • Part of the tenants useable area

    • Part of the floors common area

    Correct Answer
    A. Part of the tenants rentable area
    Explanation
    A private stairwell built between two floors occupied by one tenant is considered part of the tenant's rentable area because it is exclusively used and accessed by that tenant. It is not part of the building's common area because it is not shared by multiple tenants, and it is not part of the floor's common area because it is specific to one tenant's use.

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  • 9. 

    A run chart is a line graph in which the vertical axis represents the _______ and the horizontal axis represents the ________.

    • Time scale, measurement

    • Cause, effect

    • Frequency, measurement

    • Measurement, time scale

    Correct Answer
    A. Measurement, time scale
    Explanation
    A run chart is a line graph that displays the measurement on the vertical axis and the time scale on the horizontal axis. It is used to track and analyze data over time, allowing for the identification of trends, patterns, and variations in the measurements. The correct answer, "measurement, time scale," accurately describes the vertical and horizontal axes in a run chart.

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  • 10. 

    What provisions of a disaster plan are most important? (Choose three)

    • Designation of back-up work sites

    • Procedures for communication with external agencies

    • Emergency internal communication procedures

    • Procedures to minimize business loss

    • Procedures to minimize harm and injury of staff and building occupants

    Correct Answer(s)
    A. Emergency internal communication procedures
    A. Procedures to minimize business loss
    A. Procedures to minimize harm and injury of staff and building occupants
    Explanation
    The most important provisions of a disaster plan are emergency internal communication procedures, procedures to minimize business loss, and procedures to minimize harm and injury of staff and building occupants. Emergency internal communication procedures ensure that information can be effectively communicated within the organization during a disaster, allowing for coordinated response and decision-making. Procedures to minimize business loss help to mitigate the financial impact of a disaster, such as through data backup and recovery plans. Procedures to minimize harm and injury of staff and building occupants prioritize the safety and well-being of individuals during a disaster, including evacuation plans and emergency medical procedures.

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  • 11. 

    Which technology enabled communication could be used to personalize FM service?

    • Live chat

    • Business Portal

    • Whiteboarding

    • Wiki

    Correct Answer
    A. Live chat
    Explanation
    Live chat technology enables real-time communication between a service provider and a user. This allows for personalized interactions as the service provider can directly address the user's queries, concerns, and preferences. By using live chat, FM service providers can gather information about the user's specific needs and tailor their services accordingly. They can offer personalized recommendations, provide targeted assistance, and ensure a more customized experience for each user.

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  • 12. 

    What is the most important reason to define substantial completion before the start of a project?

    • So that the building inspector knows when to issue the certificate of occupancy

    • So the contractor can establish when to issue the certificate of completion

    • To minimize the potential for delays in finishing the project and allowing the owner to occupy the facility

    • To minimize the effect of potential errors and omissions of the architect/engineer

    Correct Answer
    A. To minimize the potential for delays in finishing the project and allowing the owner to occupy the facility
    Explanation
    Defining substantial completion before the start of a project is important to minimize the potential for delays in finishing the project and allowing the owner to occupy the facility. By establishing a clear definition of substantial completion, all parties involved in the project can have a common understanding of when the project is considered complete. This helps in avoiding any confusion or disputes regarding the completion timeline and ensures that the project progresses smoothly without unnecessary delays. Ultimately, this allows the owner to start using the facility as intended in a timely manner.

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  • 13. 

    The integration of comprehensive automated systems into FM systems that have several benefits: Select the best benefits (choose two)

    • Provide better data for budgeting and estimating purposes

    • Reduce utility costs

    • Overcome the issue of being of being a support function

    • Reduce labor costs

    Correct Answer(s)
    A. Provide better data for budgeting and estimating purposes
    A. Overcome the issue of being of being a support function
    Explanation
    The integration of comprehensive automated systems into FM systems provides better data for budgeting and estimating purposes. This means that the automated systems can collect and analyze data more efficiently, allowing for more accurate budgeting and estimating of costs. Additionally, the integration can help overcome the issue of FM being seen as a support function. By automating processes and improving efficiency, FM can demonstrate its value and importance within an organization.

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  • 14. 

    In commercial construction, an interior wall constructed with metal studs is:

    • Always load bearing

    • Usually load bearing

    • Always non-load bearing

    • Usually non-load bearing

    Correct Answer
    A. Always non-load bearing
    Explanation
    An interior wall constructed with metal studs is always non-load bearing because metal studs are not as strong as other materials like concrete or wood. Load-bearing walls are typically constructed using more robust materials to support the weight of the structure above them. Metal studs are commonly used for non-load bearing walls because they are lightweight and easy to install, making them suitable for dividing spaces or creating partitions within a building.

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  • 15. 

    The ceiling system that features and flush appearance and good sound transmission control is:

    • Concealed grid

    • Semi-exposed suspension

    • Radiant ceiling

    • Integrated modular ceiling

    Correct Answer
    A. Concealed grid
    Explanation
    A concealed grid ceiling system is designed to have a flush appearance, meaning that the grid is hidden from view, giving the ceiling a seamless and clean look. This type of ceiling also provides good sound transmission control, meaning that it helps to reduce noise and echoes in a space.

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  • 16. 

    Usable area equals rentable area minus which of the following (choose 3)

    • Building core

    • Primary circulation

    • Secondary circulation

    • Service areas

    Correct Answer(s)
    A. Building core
    A. Primary circulation
    A. Service areas
    Explanation
    The usable area of a space refers to the area that can be utilized by occupants for their intended activities. In order to calculate the usable area, certain areas need to be subtracted from the rentable area. The building core, primary circulation, and service areas are three components that are deducted from the rentable area to determine the usable area. The building core includes essential elements such as elevators, stairwells, and mechanical rooms. Primary circulation refers to corridors and hallways that provide access to different areas within the building. Service areas encompass spaces dedicated to utilities, storage, and other support functions.

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  • 17. 

    Your budget has been cut this year. You know services will suffer if your budget is cut again next year.  In the past, you have laid off people to balance the budget.  How should you prepare for next year's budget cuts?

    • Develop a list of budget cuts and inform upper management about them

    • Find equipment or contracted services that could allow a budget without the loss of services

    • Reorganize so a budget can be cut and accept reduction of service level

    • Find ways to give selected responsibilities to other departments in the company

    Correct Answer
    A. Find equipment or contracted services that could allow a budget without the loss of services
    Explanation
    To prepare for next year's budget cuts, the best approach would be to find equipment or contracted services that could help maintain the current level of services without exceeding the budget. This means exploring alternative options and solutions that can provide the necessary services at a lower cost. By doing so, the organization can minimize the impact of the budget cuts on the quality and availability of services, ensuring that they are still able to meet the needs and expectations of their stakeholders.

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  • 18. 

    The documentation of current space conditions after major construction is called?

    • Test fit

    • As-built drawings

    • Interior design drawings

    • Space programming

    Correct Answer
    A. As-built drawings
    Explanation
    As-built drawings are the documentation of the current space conditions after major construction. These drawings are created to show the exact specifications and dimensions of the space as it has been built, including any modifications or changes made during the construction process. They are important for future reference and can be used for maintenance, renovations, or any other modifications that may be required in the future.

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  • 19. 

    Leasing provides which of the following advantages (choose two)

    • Allows for minimum capital improvement

    • Allows for a business to enter the market quickly

    • Provides a hedge against inflation

    • Conveys company pride and growth

    Correct Answer(s)
    A. Allows for minimum capital improvement
    A. Allows for a business to enter the market quickly
    Explanation
    Leasing provides the advantages of allowing for minimum capital improvement and allowing a business to enter the market quickly. By leasing instead of purchasing, businesses can avoid large upfront costs for capital improvements and instead allocate their funds towards other areas of the business. Leasing also allows businesses to quickly establish a presence in the market without the delays and complexities associated with purchasing property or equipment.

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  • 20. 

    What has been one of the greatest challenges to the adoption of integrated, automated facility technology?

    • Proprietary technology

    • Intellectual property law

    • An increasingly multicultural user base

    • User resistance

    Correct Answer
    A. Proprietary technology
    Explanation
    One of the greatest challenges to the adoption of integrated, automated facility technology has been proprietary technology. This refers to technology that is owned and controlled by a specific company, making it difficult for other companies or systems to integrate or work together seamlessly. Proprietary technology often requires specific hardware or software, limiting compatibility and hindering the adoption of integrated systems. This challenge can result in increased costs, limited options, and difficulties in achieving interoperability between different systems.

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  • 21. 

    Leading indicators are predictive and lagging indicators are about results

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Leading indicators are measures or signals that can help predict future events or trends. They are used to anticipate changes or developments in a particular area. On the other hand, lagging indicators are retrospective and focus on past performance or results. They provide information about what has already happened. Therefore, the statement that leading indicators are predictive and lagging indicators are about results is accurate.

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  • 22. 

    Which of the following is an example of preventing technology risks?

    • Relocating a facility to an area with a more stable electrical distribution system

    • Installing a back up emergency generator

    • Using cloud computing for off-site storage

    • Restricting access through physical measures to IT equipment

    Correct Answer
    A. Restricting access through physical measures to IT equipment
    Explanation
    Restricting access through physical measures to IT equipment is an example of preventing technology risks because it helps to protect the equipment from unauthorized access, theft, and physical damage. By implementing measures such as locked cabinets, access control systems, and surveillance cameras, the risk of data breaches, equipment tampering, and other security incidents can be minimized. This ensures the integrity and availability of the IT equipment, reducing the potential for technology-related risks.

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  • 23. 

    The steps of identifying, ordering, receiving, storing, and expending are part of:

    • Cost estimating

    • Scheduling

    • Work control

    • Inventory control

    Correct Answer
    A. Inventory control
    Explanation
    The steps of identifying, ordering, receiving, storing, and expending are all related to the management and control of inventory. Inventory control involves monitoring and tracking the movement of goods, ensuring that the right items are available in the right quantities, and minimizing stockouts and overstock situations. By following these steps, organizations can effectively manage their inventory levels, reduce costs, and optimize their supply chain operations.

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  • 24. 

    Charging an interest rate higher than allow by law is called?

    • Good business practice

    • A breach in ethics

    • Usury

    • Jail time

    Correct Answer
    A. Usury
    Explanation
    Usury refers to the practice of charging an interest rate higher than what is legally allowed. It is considered unethical and exploitative as it takes advantage of borrowers by imposing excessive interest rates. This practice is often regulated by laws to protect consumers from being subjected to unfair and predatory lending practices. Therefore, the correct answer is Usury.

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  • 25. 

    How many District Federal Reserve banks are there in the Federal Reserve system?

    • 8

    • 10

    • 12

    • 20

    Correct Answer
    A. 12
    Explanation
    There are 12 District Federal Reserve banks in the Federal Reserve system. Each district represents a specific region of the United States and is responsible for carrying out the Federal Reserve's monetary policy, supervising and regulating banks, and providing financial services to depository institutions within their respective districts. These banks play a crucial role in maintaining the stability and effectiveness of the U.S. financial system.

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  • 26. 

    Which example BEST demonstrates cross-culture effectiveness

    • Expecting a handshake for all business introductions

    • Ignoring differences because they drive relationships apart

    • Not apologizing even if you are wrong in order to save face

    • Avoiding remarks that could embarrass superiors in a meeting

    Correct Answer
    A. Avoiding remarks that could embarrass superiors in a meeting
    Explanation
    Avoiding remarks that could embarrass superiors in a meeting is the best example of cross-culture effectiveness because it shows respect and consideration for the cultural norms and hierarchies that may exist in different cultures. By being mindful of potential embarrassment or disrespect towards superiors, individuals demonstrate their ability to navigate and adapt to different cultural contexts, which is crucial for effective cross-cultural communication and collaboration. This behavior promotes positive relationships and avoids potential misunderstandings or conflicts that could arise from cultural differences.

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  • 27. 

    A professional promise to society to monitor its members in areas not expressly covered by law us expressed through a(n):

    • Professional ethical oath

    • Peer professional covenant

    • Professional code of ethics

    • Ethical standards

    Correct Answer
    A. Professional code of ethics
    Explanation
    A professional code of ethics is a set of guidelines and principles that professionals in a specific field are expected to follow. It serves as a promise to society that professionals will conduct themselves in an ethical manner and adhere to certain standards of behavior. While laws may not explicitly cover every aspect of a profession, a code of ethics fills in the gaps and provides guidance on how professionals should act in situations where there may be ambiguity or uncertainty. Therefore, a professional code of ethics is the best expression of a professional promise to society to monitor its members in areas not expressly covered by law.

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  • 28. 

    The most common form of determining the chain of title to a property is through the:

    • Title opinion

    • Research of title

    • Torrens certificate

    • Abstract of title

    Correct Answer
    A. Abstract of title
    Explanation
    The correct answer is Abstract of title. An abstract of title is a document that provides a summary of the history of ownership and transfers of a property. It includes information such as deeds, mortgages, liens, and other legal documents that affect the property. By reviewing an abstract of title, one can determine the chain of title, which is the sequence of ownership from the original owner to the current owner. This document is commonly used in real estate transactions to ensure that the property has a clear and marketable title.

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  • 29. 

    As the facility manager, you receive a call from a tenant that just moved in to one of your buildings.  He says he has sent all his employees home because of a strong odor in the building.  Employees are complaining of headaches and feeling faint. What do you do?

    • Call the city's health department

    • Call the local EPA department

    • Go and investigate the issue yourself

    • Send your building mechanic

    Correct Answer
    A. Call the city's health department
    Explanation
    In this situation, the best course of action is to call the city's health department. The strong odor in the building and the complaints of headaches and feeling faint among the employees indicate a potential health hazard. The city's health department is equipped to handle such situations and can conduct an investigation to determine the cause of the odor and address any health concerns. Calling the local EPA department may also be a possible action, but the city's health department is more directly responsible for addressing health-related issues. Going to investigate the issue oneself or sending the building mechanic may not be the appropriate response as they may not have the necessary expertise to handle potential health hazards.

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  • 30. 

    Within the context of a business contingency plan, the most important element that needs to be considered between IT and FM is?

    • Backup site and number of essential employees

    • Configuration of computers and necessary software

    • Emergency call list

    • FM systems necessary at off-side location

    Correct Answer
    A. Backup site and number of essential employees
    Explanation
    In a business contingency plan, the most important element that needs to be considered between IT and FM is the backup site and number of essential employees. This is crucial because in the event of a disaster or disruption, having a backup site ensures that operations can continue smoothly. Additionally, identifying the number of essential employees ensures that the necessary staff is available to handle critical tasks and maintain essential functions.

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  • 31. 

    Relational databases in an automated system are important because?

    • All data items must be sequenced in order

    • Cost considerations are an important element of the system

    • Different data elements should be able to be grouped together for anaylsis

    • Each equipment category must be complete

    Correct Answer
    A. Different data elements should be able to be grouped together for anaylsis
    Explanation
    Relational databases in an automated system are important because they allow different data elements to be grouped together for analysis. This means that related data can be organized and accessed efficiently, enabling users to perform complex queries and generate meaningful insights. By structuring data into tables and establishing relationships between them, relational databases ensure data integrity and consistency. This facilitates data analysis and decision-making processes, ultimately enhancing the overall functionality and effectiveness of the automated system.

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  • 32. 

    Confidentiality of site assessments and other environmental reports is assured under all of the following doctrines except?

    • Fifth amendment privilege

    • Attorney client privilege

    • Work product doctrine

    • Self-evaluative privilege

    Correct Answer
    A. Fifth amendment privilege
    Explanation
    Confidentiality of site assessments and other environmental reports is assured under the attorney-client privilege, work product doctrine, and self-evaluative privilege. However, the Fifth Amendment privilege is not applicable in this context. The Fifth Amendment protects individuals from self-incrimination in criminal cases, and it does not pertain to the confidentiality of environmental reports.

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  • 33. 

    The mathematical process of dividing NOI by the interest rate price (value) yields?

    • Mortgage equity rate

    • Capital recovery rate

    • Annuity capitalization rate

    • Capitalization rate

    Correct Answer
    A. Capitalization rate
    Explanation
    The mathematical process of dividing NOI (Net Operating Income) by the interest rate price (value) yields the capitalization rate. The capitalization rate is a measure used in real estate to estimate the potential return on investment for a property. It is calculated by dividing the NOI by the purchase price or market value of the property. The capitalization rate is often used by investors to compare different properties and determine their profitability.

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  • 34. 

    Examination of a building site is a specific part of the

    • Project feasibility

    • Physical feasibility

    • Economic feasibility

    • Improvement feasibility

    Correct Answer
    A. Physical feasibility
    Explanation
    Physical feasibility refers to the assessment of whether a proposed project can be physically implemented or constructed in a given location. It involves evaluating factors such as the site's topography, soil conditions, availability of utilities, and compliance with building codes and regulations. In the context of a building site examination, physical feasibility would involve analyzing the site's suitability for construction, taking into account any potential physical constraints or limitations that may affect the project's implementation.

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  • 35. 

    When a facility manager considers outsourcing maintenance functions, the cost of using outside vendors for repair and maintenance of equipment should be:

    • Equal to using in-house personnel

    • Not related to in-house personnel

    • Higher than using in-house personnel

    • Lower than using in-house personnel

    Correct Answer
    A. Lower than using in-house personnel
    Explanation
    When a facility manager considers outsourcing maintenance functions, the cost of using outside vendors for repair and maintenance of equipment should be lower than using in-house personnel. This is because outsourcing typically allows for cost savings in terms of labor, equipment, and overhead expenses. By hiring external vendors, the facility manager can avoid the costs associated with hiring and training in-house personnel, as well as the expenses of maintaining equipment and facilities. Additionally, outsourcing can provide access to specialized expertise and resources that may not be available in-house, further reducing costs and improving efficiency.

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  • 36. 

    The type of lease in which the lessee pays all operating expenses is a

    • Gross lease

    • Net lease

    • Contract lease

    • Percentage lease

    Correct Answer
    A. Net lease
    Explanation
    Net or single-net lease: Tenants are responsible for their proportion of the leased space, plus their apportioned share of all operating costs, except insurance and taxes.

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  • 37. 

    Your company requires new leased office space of 10,000 square feet in the next six months. You determine that using a commercial real estate broker would expedite the site selection.  When reviewing candidates, what is the most important factor?

    • That the broker be employed by the largest commercial real estate firm in the city where your lease requirement is located

    • That the broker also be the listing agent and represent a large number of landlords buildings in the local real estate market

    • That the broker always have a long list of references from Fortune 500 companies which he or she has represented in the past

    • That the broker work with you in a consistent partnership while provided experienced market knowledge and a good understanding of how commercial office leases function for both landlords and tenants.

    Correct Answer
    A. That the broker work with you in a consistent partnership while provided experienced market knowledge and a good understanding of how commercial office leases function for both landlords and tenants.
    Explanation
    The most important factor when selecting a commercial real estate broker is that they work with you in a consistent partnership, providing experienced market knowledge and a good understanding of how commercial office leases function for both landlords and tenants. This ensures that the broker will be able to effectively assist in the site selection process and negotiate favorable lease terms. The other options, such as being employed by the largest real estate firm or having a long list of references, may be beneficial but are not as crucial as having a strong working relationship and expertise in commercial leases.

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  • 38. 

    Every real estate project begins with a:

    • Needs analysis

    • Contract

    • Feasibility study

    • Celebration

    Correct Answer
    A. Contract
    Explanation
    Legal takes precedence

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  • 39. 

    Which of the following space planning techniques will assist in bringing space/cost ratios into line:

    • Increasing the number of corridors

    • Maximizing the use of fixed walls

    • Using inconsistent work station space modules

    • Consolidating conference rooms and other support spaces

    Correct Answer
    A. Consolidating conference rooms and other support spaces
    Explanation
    Consolidating conference rooms and other support spaces can assist in bringing space/cost ratios into line. By combining multiple conference rooms and support spaces into one larger space, it reduces the overall square footage required, thus optimizing the use of space and reducing costs. This technique allows for efficient utilization of resources and promotes a more streamlined and cost-effective space planning approach.

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  • 40. 

    What is the greatest pitfall in acquiring property today?

    • Inadvertently accepting environmental contamination liability

    • Not obtaining the clear title to a property

    • Stringent zoning restrictions

    • Tax liability

    Correct Answer
    A. Inadvertently accepting environmental contamination liability
    Explanation
    Property owners may be required to clean up contaminated soil, polluted water or chemical spills. Before making any real estate acquisition, you will want to obtain an environmental impact statement to make sure you are not purchasing a property that poses an environmental threat for which you will be liable.

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  • 41. 

    What is a written instrument, evidenced by a note or bond, which the borrower give as security for the repayment of a loan?

    • Mortgage

    • Contract

    • Purchase agreement

    • Down payment

    Correct Answer
    A. Mortgage
    Explanation
    A mortgage is a written instrument, evidenced by a note or bond, that the borrower gives as security for the repayment of a loan. It is a legal agreement between the borrower and the lender, where the borrower pledges their property as collateral in exchange for the loan. If the borrower fails to repay the loan, the lender has the right to foreclose on the property and sell it to recover the outstanding debt.

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  • 42. 

    What kind of lease includes the base rent plus the tenant pays a share of real estate taxes, insurance, maintenance, repair, and operating expenses?

    • Gross lease

    • Double net lease

    • Triple net lease

    • Cost lease

    Correct Answer
    A. Triple net lease
    Explanation
    In a triple-net lease, the tenant is responsible for the proportion of the leased space, plus their apportioned share of property taxes, insurance, repairs, site maintenance, building upgrades, routine maintenance, and all operating expenses. A double-net lease would not be the correct answer in this instance because this type of lease makes the tenant NOT responsible for the insurance.

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  • 43. 

    The lease that tends to be long-term (20 years or more) is the:

    • Ground lease

    • Net lease

    • Gross lease

    • Percentage lease

    Correct Answer
    A. Ground lease
    Explanation
    A ground lease is a lease in which the tenant leases a parcel of vacant land and pays for all improvements made on the site.

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  • 44. 

    Which of the following is not usually an allowable operating expense under a lease?

    • Employee vacation/holiday pay

    • Tenant improvement costs

    • Property insurance

    • Utilities

    Correct Answer
    A. Tenant improvement costs
    Explanation
    Tenant improvement costs are not usually an allowable operating expense under a lease. Operating expenses typically include ongoing costs associated with the day-to-day operation and maintenance of the leased property. These expenses may include utilities, property insurance, and employee vacation/holiday pay. However, tenant improvement costs refer to expenses incurred to customize or improve the leased space to meet the tenant's specific needs, and these costs are usually the responsibility of the tenant rather than the landlord.

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  • 45. 

    In a gross lease, the tenant is responsible for:

    • Everything except insurance and taxes

    • Everything except operating costs

    • A single rent payment

    • Tenant improvements

    Correct Answer
    A. A single rent payment
    Explanation
    Gross or fully serviced leases cover all operating costs, that is, the tenant does not bear any of the direct responsibility for operating costs but pays a single rental payment.

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  • 46. 

    What do you call the area of load bearing surfaces located above or below occupied building floors that are not available for general occupancy due to inadequate clear headroom, but that may contain building mechanical or electrical predominately serving adjacent floors or provide access to such systems?

    • Excluded area

    • Service area

    • Interstitial area

    • Core area

    Correct Answer
    A. Interstitial area
    Explanation
    The term "interstitial area" refers to the area of load bearing surfaces located above or below occupied building floors that are not available for general occupancy due to inadequate clear headroom. These areas may contain building mechanical or electrical systems that predominantly serve adjacent floors or provide access to such systems.

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  • 47. 

    What is the ratio of usable area divided by the rentable area called?

    • Building efficiency ratio

    • Rule of 72

    • Equity ratio

    • Lease option ratio

    Correct Answer
    A. Building efficiency ratio
    Explanation
    The ratio of usable area divided by the rentable area is called the building efficiency ratio. This ratio helps determine how efficiently the space within a building is being utilized. It is commonly used in real estate and property management to assess the effectiveness of a building's layout and design in maximizing usable space for tenants. A higher building efficiency ratio indicates a more efficient use of space, while a lower ratio suggests wasted or underutilized areas within the building.

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  • 48. 

    What is the term used to describe the area of a building that measures to the inside surface of the exterior building walls to the finished surface of walls surrounding major vertical penetrations and building core and service spaces, and to the center of partitions separating assignable area of from secondary circulation space?

    • Building gross area

    • Building rentable area

    • Building usable area

    • Building assignable area

    Correct Answer
    A. Building gross area
    Explanation
    Assignable area is the usable area minus the secondary circulation space.

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  • 49. 

    The sum of fixed and variable expenses is called:

    • Operating expenses

    • Variable expenses

    • Fixed expenses

    • Total expenses

    Correct Answer
    A. Operating expenses
    Explanation
    Operating expenses refer to the sum of fixed and variable expenses incurred by a business in its day-to-day operations. These expenses include rent, salaries, utilities, marketing costs, and more. By combining both fixed and variable expenses, operating expenses provide a comprehensive view of the total costs associated with running a business. This term is commonly used in financial statements and budgeting to evaluate the overall financial health and efficiency of a company.

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Quiz Review Timeline (Updated): Jan 17, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jan 17, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 29, 2015
    Quiz Created by
    Katherine

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