ANSWERS Part a Income properties: Property bought or developed to earn income through renting, leasing or price appreciation.

Income property can be residential or commercial. Residential income property is commonly referred to as "non-owner occupied". A mortgage for a "non-owner occupied" property may carry a higher interest rate than an "owner occupied" mortgage as it is viewed by lenders as a higher risk. A common practice during periods of home price appreciation is for investors and speculators to purchase residential income properties with the intent that rents will cover their monthly expenses for a period of time until the property can be sold for a large capital gain. As with all markets during times of fast price appreciation, and as with all market bubbles, those that enter the market first and get out first usually do well. Those that enter the market later, and get out last usually don t do as well. PROPERTY RIGHTS: Laws created by governments in regards to how individuals can control, benefit from and transfer property. Economic theory contends that government enforcement of strong property rights is a determinant regarding the level of economic success seen in the area. Individuals will create new forms of property to generate wealth, only when they are assured that their rights to their property will protect them against unjust and/or unlawful actions by other parties. For example, if property rights were not established to prevent a government from freely expropriating foreign created business ventures without proper compensation, then it is unlikely that any foreign company would risk going into that country for risk of losing their entire operation. While property rights regarding physical property has been well established. Many justice systems must now contend with property that solely exists in a digital or virtual setting. For example, who ultimately owns a house built in a game on the Internet, the user that created the house with his character? Or the game development company that created the game who also owns the server in which the house resides in NET OPERATING INCOME: A company's operating income after operating expenses are deducted, but before income taxes and interest are deducted. If this is a positive value, it is referred to as net operating income, while a negative value is called a net operating loss (NOL).

NOI is often viewed as a good measure of company performance. Some believe this figure is less susceptible than other figures to manipulation by management. JOINT VENTURE: The cooperation of two or more individuals or businesses in which each agrees to share profit, loss and control in a specific enterprise. Forming a joint venture is a good way for companies to partner without having to merge. JVs are typically taxed as a partnership. DISCOUNTED CASH FLOW: A valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one. Calculated as:

Also known as the Discounted Cash Flows Model. There are many variations when it comes to what you can use for your cash flows and discount rate in a DCF analysis. Despite the complexity of the calculations involved, the purpose of DCF analysis is just to estimate the money you'd receive from an investment and to adjust for the time value of money. Discounted cash flow models are powerful, but they do have shortcomings. DCF is merely a mechanical valuation tool, which makes it subject to the axiom "garbage in, garbage out". Small changes in inputs can result in large changes in the value of a company. Instead of trying to project the cash flows to infinity, terminal value techniques are often used. A simple annuity is used to estimate the terminal value past 10 years, for example. This is done because it is harder to come to a realistic estimate of the cash flows as time goes on.

MORTGAGE: A debt instrument that is secured by the collateral of specified real estate property and that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large purchases of real estate without paying the entire value of the purchase up front. Mortgages are also known as "liens against property" or "claims on property". In a residential mortgage, a home buyer pledges his or her house to the bank. The bank has a claim on the house should the home buyer default on paying the mortgage. In the case of a foreclosure, the bank may evict the home's tenants and sell the house, using the income from the sale to clear the mortgage debt. EQUILIBRIUM PRICING: The market price at which the suppLy of an item equals the quantity demanded BENCH MARKING: A standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose When evaluating the performance of any investment, it's important to compare it against an appropriate benchmark. In the financial field, there are dozens of indexes that analysts use to gauge the performance of any given investment including the S&P 500, the Dow Jones Industrial Average, the Russell 2000 Index and even competitor fund. INVESTMENT DECISIONS: Investment decisions are made by investorsand investment managers. Investors commonly perform investment analysis by making use of fundamental analysis, technical analysis, screeners and gut feel Investment decisions are often supported by decision tools. The portfolio theory is often applied to help the investor achieve a satisfactory return compared to the risk taken. ASSET CLAUSE: A residual assets clause is an extremely important clause in your Will. 1. Forgotten assets: Residual assets clause will include any assets which you have forgotten that you own or forgotten to write about in the Will.

2. Assets without proper records: Sometimes there are assets for which the proper records are destroyed, or do not exist, or are difficult to find. For such assets, residual assets clause is ideal. 3. Assets you do not wish to expressly state in your Will: A lot of times, we do not wish to give the details of all our assets in our Will because of various reasons. All such assets are covered by the residual assets clause in the Will. 4. Assets acquired after making the Will: If you add any assets after making the Will, such assets will be distributed as per the residual assets clause MARKET RISK: The day-to-day potential for an investor to experience losses from fluctuations in securities prices. This risk cannot be diversified away. Also referred to as "systematic risk". The beta of a stock is a measure of how much market risk a stock faces.