Real Estate Finance And Investment Question Paper
Real Estate Finance And Investment
Course:Bachelor Of Commerce(Bcom) ()
Institution: Kabarak University question papers
Exam Year:2008
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KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2008/2009 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: FNCE 424
COURSE TITLE: REAL ESTATE FINANCE AND INVES TMENT
STREAM: Y4S2
DAY: MONDAY
TIME: 11.00 - 1.00 P.M.
DATE: 11/8/2008
INSTRUCTIONS:
1. Answer questions one and any other two
2. Write your registration number clearly, be neat, brief and show all your workings
PLEASE TURN OVER
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QUESTION 01 (TOTAL MARKS 30)
i) Describe the progress of Real Estate from the early days of feudalism era to the current heavy
investment industry. 4 marks
ii). Discuss any 5 job opeings that are normally found in the Real Estate Industry. 10 marks
iii). Justify the need for property management in the current booming Real Estate Businesses.
6 marks
iv). Assume that an investor has Ksh.500, 000 and wants to invest this amount in a variable – rate –
payment mortgage at 8.5 percent original interest rate, with a 30 year term and monthly
payments. In the contract, the interest rate is meant to be adjusted at the end of each year and
rate increases at 0.25 percent per year.
Calculate the monthly payments for the 1st , 2nd and the 3rd years of the loan. 10 marks
QUESTION 02 (TOTAL MARKS 20)
i). Compare and contrast the fixed - and variable rate mortgages 10 marks
ii). Currently, there are many developments in the Real Estate Industry especially in the financial
issues. Discuss any 5 recent changes in this industry. 10 marks
QUESTION 03 (20 M ARK S)
In the early1990s there were over 20 housing finance providers in Kenya. Only five of these
institutions remained, namely: Housing Finance, Savings and Loans, Equity Bank (formerly Equity
Building Society), East Africa Building Society Bank (former East Africa Building Society), and
Family Finance Building Society. Several commercial banks in the past 2 years have developed
mortgage products and are competing directly with the only remaining housing finance institution.
With the above briefed background in mind, discuss the Kenyan mortgage market in respect to its
development and advice the Government on what it can do in support of the industry. 20 marks
QUESTION 04 (TOTAL MARKS 20)
i) Despite the fact that most of the Kenyans live in temporary structures, it is still difficult for the
low and middle income earners to access the mortgage facilities in the real estate financial
market.
Discuss any 5 factors that could have led to this exclusion. 10 marks
ii). Give a detailed description of Mortgage Finance Industry Structure in Kenya 10 marks
QUESTION 05
i). Discuss any 3 approaches used to determine the fair market value of a property. 10 marks
ii). Describe the current trend of the Kenyan Mortgage Finance Institutions industry. 10 marks
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