Real Estate Diversification Strategies
10 Questions
1 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary reason why direct real estate portfolios are not frequently rebalanced?

  • illiquidity of the assets and time lag between decision and implementation (correct)
  • lack of liquidity and high transaction costs
  • transaction costs and regulatory restrictions
  • tax implications and market volatility
  • Why do fund managers tend to follow a similar asset mix to their peers?

  • to minimize career risk (correct)
  • to hedge against inflation
  • to diversify their portfolios
  • to maximize returns
  • What is a consequence of real estate's illiquidity?

  • decreased volatility
  • increased liquidity
  • difficulty in rebalancing portfolios (correct)
  • increased correlation with other assets
  • Why is direct real estate not typically governed by market-wide factors?

    <p>because most portfolios hold fewer than 30 properties</p> Signup and view all the answers

    What is a key characteristic of direct real estate investments?

    <p>long-term investment horizon</p> Signup and view all the answers

    What is the implication of the combination of transaction costs and time lag?

    <p>difficulty in achieving an optimal portfolio</p> Signup and view all the answers

    What is a perceived benefit of deviating from the normal market portfolio mix?

    <p>increased returns through risk-taking</p> Signup and view all the answers

    Why do real estate portfolios often hold few properties?

    <p>due to the poor diversification of real estate</p> Signup and view all the answers

    What is the relationship between real estate and market-wide factors?

    <p>real estate is influenced by real estate-specific factors</p> Signup and view all the answers

    What is the potential consequence of assuming an abnormal exposure to real estate?

    <p>career risk through non-conformity</p> Signup and view all the answers

    More Like This

    Real Estate Investing
    15 questions

    Real Estate Investing

    FeistyAquamarine avatar
    FeistyAquamarine
    Real Estate Investing
    5 questions
    Real Estate Investing
    8 questions

    Real Estate Investing

    LaudableChupacabra169 avatar
    LaudableChupacabra169
    Use Quizgecko on...
    Browser
    Browser