Investment value differs from market value in that investment value:
Correct Answer
C) Reflects value to one investor's own criteria
Why this is correct: Investment value is specific to a particular investor's needs, goals, tax situation, and financing. It is subjective and personal, unlike market value, which is an objective estimate of the most probable price in an open market. Why the other choices are wrong: 'Is always higher than market value would be' is false; it can be higher or lower. 'Cannot be derived using the income approach' is false; the income approach is often used, but with investor-specific inputs. 'Is the same figure as the assessed value is' is false; assessed value is for property tax purposes. Exam tip: Market value = typical buyer. Investment value = specific buyer.
Why This Is the Correct Answer
Investment value reflects a particular investor’s criteria and may be above or below a market-value conclusion. It is not the tax assessment and may use an income approach.
More USPAP Questions
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