CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Which index must control for differences in the characteristics (e.g., size and location) of the property?

A. A repeat sales index.
B. A hedonic index.
C. An appraisal's based index.
Correct Answer: B

Differences in characteristics cause values to differ so they should be separated from the differences in value due to changes in market conditions. The hedonic procedure models property prices as a function of various characteristics of the properties, such as size, age, location, and quality.

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