CPA › Advanced Financial Management › Real estate finance
Back to Unit

Real estate finance

Unit: Advanced Financial Management

Premium Topic Resources

Sign in to download the full Topic PDF and enable offline revision mode.

Login to Access
Join the community! 550+ students upgraded in the last 24 hours. Limited Discount Seats Available

Practice CPA Advanced Financial Management Real estate finance questions with detailed answers and explanations.

Access past exam questions by topic, improve your understanding, and download PDF for offline revision.

December 2025

 1 Questions
Question 1b
​​Evaluate THREE investment characteristics of real estate investment trusts (REITS).


Answers and Explanations are locked.

Login to View Answer

August 2025

 1 Questions
Question 2b
​​Securitisation has become an important tool in modern financial markets, enabling financial institutions to transform illiquid assets into tradeable assets. 

Required: 
In relation to the above statement, evaluate FIVE advantages of securitisation as a vehicle of financing real estate development in your country.


Answers and Explanations are locked.

Login to View Answer

December 2024

 1 Questions
Question 3a
Examine THREE instruments that could be used in financing real estate. ​​


Answers and Explanations are locked.

Login to View Answer

August 2024

 1 Questions
Question 1a
​​In relation to real estate finance, highlight FOUR differences between a “residential property” and a “commercial property”.


Answers and Explanations are locked.

Login to View Answer

April 2024

 1 Questions
Question 4a
​​Explain FOUR advantages of real estate investments.


Answers and Explanations are locked.

Login to View Answer

December 2023

 1 Questions
Question 4a
Discuss FOUR real estate financing options available to real estate investors in your country.


Answers and Explanations are locked.

Login to View Answer

August 2023

 1 Questions
Question 3b
​ ​​The following information relates to an office complex:

Sh.“000”
Gross potential rental income
1,050,000
Insurance and taxes 
78,000
Utilities
54,000
Repairs and maintenance 
69,000
Depreciation
120,000
Interest on proposed financing 
54,000

Additional information:
1.
Vacancy and collection losses are estimated at 6%.
2.
Recently, two buildings have been sold in the same locality:
  • The first building had a net operating income of Sh.1,500,000 and was sold for Sh.12 million.
  • The second building had a net operating income of Sh.675,000 and was sold for Sh.4.8 million.
Required: 
(i) The net operating income (NOI) for the office complex.

(ii) The appraised price of the office complex using the income approach.


Answers and Explanations are locked.

Login to View Answer

April 2023

 1 Questions
Question 3b
​​One of the instruments of real estate financing is mortgages. 

 Highlight FOUR methods by which the interest on a mortgage may be charged.


Answers and Explanations are locked.

Login to View Answer

December 2022

 1 Questions
Question 2c
​​Describe five forms of debt financing in regards to real estate.


Answers and Explanations are locked.

Login to View Answer

August 2022

 1 Questions
Question 2c
​ ​​Discuss Modigliani and Miller’s proposition in a real estate finance context clearly stating the assumptions of the theory.


Answers and Explanations are locked.

Login to View Answer

April 2022

 1 Questions
Question 4b
​​Propose three reasons why residential real estate investment trusts (REITs) are not popular with investors.


Answers and Explanations are locked.

Login to View Answer

Pilot December 2021

 1 Questions
Question 5b
​​Explain four advantages of investing in Real Estate Investment Trusts.


Answers and Explanations are locked.

Login to View Answer

September 2021

 1 Questions
Question 2a
​​Your country is considering establishing a mortgage refinancing company to support an affordable housing project for its citizens. The company's mandate will be to provide secure, long-term finance to primary mortgage lenders who will then advance the same to individual borrowers. 

Required: 
In the context of the above statement: 

(i) Identify three types of primary mortgage lenders that are likely to benefit from the mortgage refinancing facility in your country.

(ii) Summarise three objectives of a mortgage refinancing company in an economy. 

(iii) Highlight three minimum requirements that one must fulfil in order to qualify for a mortgage in real estate financing.


Answers and Explanations are locked.

Login to View Answer

May 2021

 1 Questions
Question 5b
​​Examine four advantages of investing in real estate.


Answers and Explanations are locked.

Login to View Answer

November 2020

 1 Questions
Question 3a
​​Explain the difference between the following terms as applied in mortgage and financial markets:

(i). "Primary mortgage market" and "secondary mortgage market".

(ii). "Fixed-rate mortgage" and "adjustable-rate mortgage

(iii) "Lien" and "recourse"


Answers and Explanations are locked.

Login to View Answer

November 2019

 1 Questions
Question 4b
​​Property A and property B are categorised under the real estate category. Property A is' all equity financed while property B is financed partly using debt and partly by equity finance. 

Both properties generated operating profit (EBIT) of Sh.41,245,900 annually. This is expected to remain constant each year in perpetuity. Unlike property A which is wholly equity financed, property B is financed partly by equity and partly by 10% debt of Sh.215,000,000. 

The cost of equity is 12% for both properties and there are no corporation taxes. Each unit of debt is trading at par. 

Required: 
The current value of each property using the Net Income (NI) approach.


Answers and Explanations are locked.

Login to View Answer

May 2019

 1 Questions
Question 3a
​​Discuss four types of risks associated with investment in real estate investment trust (REITs) securities.


Answers and Explanations are locked.

Login to View Answer

November 2018

 1 Questions
Question 5a
​​Analyse three assumptions ofthe income approach of valuing real estates business in your country.


Answers and Explanations are locked.

Login to View Answer
Related Topics