Given today's real estate and interest rate market environments, what is the problem with defining a "Terminal CAP" with a normal distribution? Suggest a different kind of distribution that might be more suitable and explain how this distribution is likely to affect your IRR output compared with a normal distribution. Will it increase the chance that you will earn your required rate of return?

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Defining a Terminal CAP with a normal distribution in todays real estate and interest rate m... View the full answer