Check Your Understanding-Answers
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How do life insurance companies get involved in the investment market?
Life insurance companies like to invest in large commercial projects such as shopping malls. Since they do not have a restricted geographical lending area, they have no problem lending on projects that are distant from their home offices.
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How does a limited partnership differ from a general partnership?
A limited partnership has one general partner who has unlimited personal liability for the group's debts and obligations, while the other partners are liable only up to the limits of their capital investment. In a general partnership, all partners have unlimited personal liability for the debts and obligations of the partnership.
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What does the net operating income of a property represent?
This figure represents the amount of income available as a return to the investor.
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When studying the characteristics of an area in which an investment property is located, what factors should the investor look at carefully?
Population, rental trends and projected demand for units in the area.
