California Real Estate Practice Exam

Value can best be described as?

1. Cost to own

2. Price asked

3. Value in exchange

4. Assessed valuation

The correct answer is: Value in exchange

Value in Exchange is the best description for value because it refers to the worth of something in terms of what it can be traded or exchanged for. The other options are incorrect because they only focus on one aspect of value, such as cost or price, rather than the overall worth of something. For example, cost to own only considers the expenses involved in owning something, while assessed valuation refers to the value assigned for tax purposes and may not necessarily reflect the actual worth of an item in the market. Value in exchange takes into account the factors of cost, price, and other elements that contribute to the overall value of something when it is traded or exchanged.