TheoryRCE Module 2 Real Estate Practice Questions
Free RCE Module 2 Real Estate practice questions with answers and plain-English explanations. Browse the PDF, video and online mock test.
RCE Module 2 Real Estate Questions
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Q1What is the primary concern of antitrust law as it applies to REALTOR® associations?
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✓ Correct answer: Prohibiting agreements that unreasonably restrain trade
Antitrust law primarily prohibits agreements that unreasonably restrain trade, which in REALTOR® associations can manifest as price-fixing discussions among competing brokers who are association members.
Q2Which of the following discussions at a board meeting would MOST likely raise antitrust concerns?
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✓ Correct answer: What commission rates members should charge
Discussions about what commission rates members should charge is a clear example of price fixing, which violates antitrust laws.
Q3Under the duty of loyalty, what must association directors avoid?
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✓ Correct answer: Conflicts of interest
The fiduciary duty of loyalty requires directors to avoid conflicts of interest where their personal interests might conflict with those of the association.
Q4Which of the following is a key difference between governance and management in a REALTOR® association?
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✓ Correct answer: The board sets policy while staff implements it
Governance (board) focuses on setting policy, direction, and oversight, while management (staff) is responsible for implementing policies and day-to-day operations.
Q5What should an Association Executive do if board members begin discussing what commission rates 'should be' during a meeting?
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✓ Correct answer: Immediately stop the discussion and explain the antitrust risk
To avoid antitrust violations, the AE should immediately stop the discussion, explain the antitrust risk, document the intervention, and potentially seek legal counsel if needed.
Q6Which government agencies primarily enforce federal antitrust laws that affect REALTOR® associations?
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✓ Correct answer: FTC and DOJ
The Federal Trade Commission (FTC) and Department of Justice (DOJ) are the primary federal agencies that enforce antitrust laws affecting REALTOR® associations.
Q7Which type of insurance is MOST important for protecting the association against claims related to board member decision-making?
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✓ Correct answer: Directors and Officers (D&O) insurance
Directors and Officers (D&O) insurance specifically protects the organization and its board members from claims related to governance decisions and actions.
Q8What is the legal doctrine that can hold an association liable for actions of its volunteers when they are acting on behalf of the association?
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✓ Correct answer: Respondeat superior
Respondeat superior ("let the master answer") is a legal doctrine holding organizations liable for the actions of their agents, including volunteers acting on behalf of the association.
Q9Which fiduciary duty requires board members to make informed decisions after appropriate research and consultation?
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✓ Correct answer: Duty of care
The duty of care requires board members to be informed, attentive, and prudent in their decision-making, which includes proper research and consultation.
Q10Which of the following activities would MOST likely trigger DOJ or FTC scrutiny of a REALTOR® association?
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✓ Correct answer: Policies that appear to exclude innovative business models
Attempts to exclude innovative business models or restrict competition are most likely to trigger regulatory scrutiny, as they may violate antitrust laws by restricting market competition.
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