Question #18
Reading: Reading 33 Real Estate Investments
PDF File: Reading 33 Real Estate Investments.pdf
Page: 9
Status: Incorrect
Correct Answer: B
Your Answer: C
Question
Which of the following is the most likely to represent an advantage of investing in publicly traded real estate securities over direct ownership of property? Publicly traded real estate securities offer:
Answer Choices:
A. more control over investment decisions
B. greater liquidity
C. lower price volatility
Explanation
One of the main advantages of investing in publicly traded equity real estate securities
stems from the fact that these securities trade on stock exchanges, which results in
greater liquidity compared with buying and selling real estate directly. The downside of
trading on a stock exchange is that publicly traded equity real estate securities have
greater price volatility than do directly owned properties. Another disadvantages of
publicly traded real estate securities is that they offer investors little to no control over
investment decisions.