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- In general, what effect would a reduction in risk have on “going-in” cap rates? What would this effect be if it occurred at the same time as an unexpected increase in demand? What would the effect on property values be?what is the expected return and should you buy it?When do you think a person would opt to use the Payback Period Method instead of the Net Present Value or Internal Rate of Return? Give an example.
- Why would a risk- averse (likes to avoid risks)type of investor prefer fixed income over equities?What is a satisfiable investment? When the present value of benefits surpasses the cost of an investment, what conclusion can be drawn about the investor's rate of return in comparison to the discount rate?As an investor now or in the future, what are steps that you would take to mitigate the risk of interest rate risk? Do you believe age and current economic status play a role in how much interest rate risk investors can tolerate?
- Why would a risk-taker (likes to take risks) type of investor prefer equities over fixed income?Rational investors prefer to receive money today rather than the same amount of money in the future. Why is the consideration of time is important in financial decision making, how can time value be adjusted?What are the advantages/disadvantages of real estate as alternative investments?