PSI Knowledge Exam 4 — Questions and Answers
Question 1: Which PSI exam candidate requirement typically applies at the testing center?
- Bringing your own calculator is always permitted
- Presenting two forms of valid ID, one of which is government-issued with a photo (Correct answer)
- Arriving within 30 minutes after the scheduled start time
- Wearing a specific uniform or dress code
Correct answer: Presenting two forms of valid ID, one of which is government-issued with a photo
PSI testing centers typically require candidates to present two valid forms of ID, with at least one being a government-issued photo ID such as a driver's license or passport.
Question 2: In property insurance, 'replacement cost value' (RCV) differs from 'actual cash value' (ACV) in that RCV:
- Deducts for depreciation before paying the claim
- Pays what it costs to replace the item new with no depreciation deduction (Correct answer)
- Only covers items purchased within the last year
- Applies a co-insurance penalty to every claim
Correct answer: Pays what it costs to replace the item new with no depreciation deduction
Replacement cost value covers the cost to replace damaged property with a new equivalent, while actual cash value subtracts depreciation from the replacement cost.
Question 3: A real estate agent's fiduciary duty of 'loyalty' to a client means the agent must:
- Share the client's confidential information with all parties
- Put the client's interests above all others, including the agent's own interests (Correct answer)
- Disclose all offers regardless of the client's instructions
- Represent additional clients in competing transactions
Correct answer: Put the client's interests above all others, including the agent's own interests
The fiduciary duty of loyalty requires a real estate agent to place the client's interests first, avoiding conflicts of interest and self-dealing.
Question 4: Under workers' compensation laws, an injured employee typically:
- Must prove employer negligence to receive benefits
- Receives benefits regardless of who was at fault for the injury (Correct answer)
- Can only receive benefits if injured by a co-worker
- Must file a lawsuit before receiving medical coverage
Correct answer: Receives benefits regardless of who was at fault for the injury
Workers' compensation is a no-fault system, meaning employees receive medical and wage benefits for work-related injuries without needing to prove the employer was negligent.
Question 5: What is the primary purpose of a building permit in construction?
- To generate revenue for the municipality only
- To ensure construction work meets safety codes and standards (Correct answer)
- To restrict the number of contractors working in an area
- To establish property tax assessments
Correct answer: To ensure construction work meets safety codes and standards
Building permits ensure that construction projects comply with local safety codes, zoning regulations, and structural standards to protect public health and safety.
Question 6: An insurance 'binder' serves as:
- Proof of final policy issuance
- Temporary evidence of coverage until a formal policy is issued (Correct answer)
- A summary of all exclusions in the policy
- A mandatory disclosure form for high-risk applicants
Correct answer: Temporary evidence of coverage until a formal policy is issued
An insurance binder is a temporary written agreement that provides proof of coverage until the full insurance policy can be formally issued and delivered.
Question 7: In real estate, 'blockbusting' refers to the illegal practice of:
- Combining multiple small properties into one large parcel
- Inducing homeowners to sell by making representations about a neighborhood's changing demographics (Correct answer)
- Refusing to show properties in certain neighborhoods
- Offering a lower purchase price based on the buyer's race
Correct answer: Inducing homeowners to sell by making representations about a neighborhood's changing demographics
Blockbusting is a discriminatory and illegal practice of pressuring homeowners to sell by suggesting that minority groups moving into the area will lower property values.
PSI Knowledge Exam 4
Which PSI exam candidate requirement typically applies at the testing center?