Pearson Vue Test Questions and

1

Pearson Vue Test Questions and Answers | Latest Version | 2025/2026 | Correct and Verified

What is the main benefit of owning real estate as an investment?

• Unlimited tax-free withdrawals

✔✔ B. Potential for appreciation and rental income

• Guaranteed monthly returns
• Elimination of all debt

Which of the following best defines a deductible in an insurance policy?✔✔ A. The amount the policyholder pays before coverage starts

• The total value of the property insured
• A discount offered for paying annually
• The time it takes to file a claim

What does LTV stand for in real estate financing?

• Loan to Value

✔✔ B. Loan-to-Value 1 / 4

2

• Loan Type Verified
• Leverage Tracking Value

Which type of insurance covers damage to your property from fire and storms?

• Life insurance

✔✔ B. Homeowners insurance

• Mortgage insurance
• Umbrella insurance

What is the main reason investors diversify their portfolios?

• To increase taxes

✔✔ B. To reduce risk exposure

• To eliminate property management
• To decrease cash flow

Which of the following is a characteristic of a fixed-rate mortgage?

• The interest rate changes monthly

✔✔ B. The interest rate remains constant 2 / 4

3

• The payments decrease every year
• The loan is only for five years

In real estate, what is equity?

• The total property value

✔✔ B. The value you own minus what you owe

• The monthly mortgage payment
• The total amount borrowed

Which of the following is typically covered by landlord insurance?

• The tenant’s belongings
• Life insurance for tenants

✔✔ C. Damage to the rental structure

• Appreciation in property value

What is a short sale in real estate?✔✔ A. Selling a property for less than the mortgage balance

• Selling property faster than the average 3 / 4

4

• A type of rental lease
• Selling a property at an auction

Which document legally transfers property ownership?

• Lease
• Promissory note

✔✔ C. Deed

• Mortgage

What is the function of title insurance?

• To protect tenants from eviction

✔✔ B. To protect against ownership disputes and title issues

• To ensure mortgage approval
• To pay property taxes

Which of the following would be considered a passive real estate investment?✔✔ A. Investing in a REIT

• Flipping houses
• / 4