CFA Level I · CFA Level I Exam · Real Estate and Infrastructure
An investor buys shares of a listed company that owns and operates a portfolio of shopping centers and distributes most of its income to shareholders. Compared with directly owning a shopping center, this form of real estate investment most likely offers:
Listed real estate company or REIT shares most likely offer higher liquidity because they trade on a stock exchange. Direct ownership gives more control and less equity market correlation in pricing, but it is illiquid and requires large lump-sum capital.
- Agreater control over property-level decisions
- Bhigher liquidity through trading on a stock exchangeCorrect
- Clower exposure to equity market volatility
Explanation
Publicly traded REIT shares are listed securities, so they trade daily and are more liquid than direct property. Direct ownership gives more control, and listed REITs tend to be more exposed to equity market swings, not less, so the other options describe features of direct ownership.
Did you get it right without looking?
One question tells you little. A timed set on Real Estate and Infrastructure shows your real accuracy, how long you take and where you lose marks.
More Real Estate and Infrastructure questions
- A private property is purchased for 10.0 million. During the year it earns net operating income of 0.60 million and its appraised value rise…
- Compared with an operating (brownfield) infrastructure asset, a greenfield infrastructure project most likely exhibits:
- Which of the following is the most likely reason that infrastructure investments are often used as a partial hedge against inflation?
- An analyst values an office building by dividing its stabilized net operating income by a rate derived from recent sales of comparable prope…
- An investor wants exposure to infrastructure with daily liquidity and the ability to buy small amounts. Which of the following vehicles is m…
- Compared with a greenfield infrastructure project, a brownfield project is most likely to have: