Appraisal-based indices are derived from what type of values?

• A. Market values determined by sales transactions
• B. Estimated values provided by appraisers
• C. Historical price trends over time
• D. Projected future income from properties

Answer: (B)

Appraisal-based indices are derived from estimated values provided by appraisers. This means that the values used in these indices are assessments made by professionals who estimate the worth of properties based on various factors such as location, condition, and comparable sales. These appraisals are not directly based on actual sales prices but rather on the appraiser's judgment of what the property is worth in the current market context. This approach allows for a systematic methodology in estimating property values, often used in real estate investment analysis to gauge performance over time.

Other options, such as market values determined by sales transactions, represent actual sales figures and would form price-based indices instead. Historical price trends focus on past market performance without incorporating professional appraisal assessments. Projected future income concerns anticipated returns rather than the current valuation of the assets, which is why these options do not correctly capture the nature of appraisal-based indices.