CFA Level I · CFA Level I Exam · Real Estate and Infrastructure
Which feature most likely distinguishes social infrastructure from economic infrastructure?
Social infrastructure, such as hospitals and schools, most likely earns availability-based payments from government instead of fees tied to user volumes. This shifts demand risk away from the investor, whereas economic infrastructure like toll roads depends on usage.
- APayments are often availability-based, made by government rather than usersCorrect
- BRevenue is derived from user volumes such as traffic
- CAssets are exposed to commodity price risk
Explanation
Social infrastructure such as schools and hospitals typically earns availability payments from a government counterparty, so demand risk is low. Volume-based user fees characterize economic assets like toll roads and airports.
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