Question: Please I need help fast! Will upvote! Thank you in advance! 1- If you were buying a large apartment (multi-family) complex, which of the following
Please I need help fast! Will upvote! Thank you in advance!
1- If you were buying a large apartment (multi-family) complex, which of the following risks would you be least concerned about? Ch13
| Regulatory (legislative) risk | ||
| Inflation risk | ||
| Business and general economic risk | ||
| Management risk |
2-
Standard deviation is a tool that can be used in conjunction with a real estate proforma analysis. The results provide information on: Ch13
| How much your specific investment varies from a "standard" real estate investment | ||
| Where you might be in the standard business cycle for this sector of real estate | ||
| The variability of expected returns under a probability-weighted sensitivity or scenario analysis | ||
| The standard amount your returns would be impacted by any given variable change
|
3-
The purpose of "partitioning the IRR" is best described as: Ch13
| Determining how dependent your analysis model is on your "going-out" assumptions versus your operating assumptions | ||
| To determine the parts that make up your required return including the risk free portion, and premiums for inflation, leverage, and other real estate related risks. | ||
| Acknowledging the difference between Internal Rate of Return and Required Rate of Return | ||
| To split out the risk of a project by variables used in a model through the application of a sensitivity analysis. |
4-
You are considering buying one of two reasonably leveraged real estate investments. Investment A shows a 10% IRR. Investment B, with slightly higher leverage, shows a 13% IRR. Which do you buy? Ch 13
| Buy investment B since it has higher returns | ||
| Buy investment A since it has lower risk | ||
| Buy investment B as it has substantially higher returns with only slightly higher leverage | ||
| There is not enough information in the question to make an informed decision |
5-
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Which of the following risks is likely to be the most significant when considering an existing commercial income property: Ch13
Lease rollover risk
Inflation risk
Interest rate risk
Management risk
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