10 Questions
What should investors consider when comparing the investment returns on a real estate investment with returns on other investments?
The risk and return on alternative investments
What factor affects some real estate properties more than others in terms of variability of income produced?
The type of property and its location
What increases the financial risk for real estate investors?
The amount of debt and its structure
What are real estate investors in the business of dealing with?
Business risk of loss due to economic conditions
What should an investor decide about an income-producing property?
Whether the property provides a competitive return
What type of risk involves the potential for financial loss due to the inability of borrowers or tenants to meet their financial obligations?
Credit Risk
Which type of risk is related to the impact of economic and market conditions on real estate values?
Market Risk
What type of risk involves the potential difficulty in quickly converting real estate assets into cash without significant loss of value?
Liquidity Risk
Which risk is associated with the replacement cost of real estate tending to increase with inflation?
Inflation Risk
What type of risk involves potentially taking on liability for cleanup costs that far exceed the value of the property?
Environmental Risk
This quiz covers the considerations that investors should take into account when comparing investment returns on a specific real estate investment with returns on other real estate investments and other investments in general.
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