CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

The most commonly used method for appraising residential properties is:
A. the comparative sales approach.
B. the income approach.
C. the cost approach.
Explanation: The most commonly used approach to appraising residential properties is the comparative sales approach.

User Contributed Comments 6

User Comment
ninad123 Why is this so? I presumed B to be the right answer.
zed888 'residential' is the key term here
jasonkwk because it is the easiest approach.
farhan92 think one way of looking at this is when your neighbour sells his/her house for x amount. You would assume your house is worth relatively the same amount as x
Inaganti6 thanks farhan, we could not have figured that out without your oh-so-valuable and life-saving advice. jk
thanhb91 I would say zed888 is right in this case since the question asks for "residential" which doesn't use to generate income (rent residential belongs to commercial since it is used to generate income, rent in this case). Cost approach is not common since it is used to value unique property.
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