- CFA Exams
- CFA Level I Exam
- Study Session 15. Alternative Investments
- Reading 40. Publicly Traded Real Estate Securities
- Subject 3. Relative value (price multiple) approach
CFA Practice Question
The most frequently used approach in valuing REIT shares is:
A. Net asset value approach.
B. Relative value approach.
C. Discounted cash flow approach.
Explanation: The three approaches are certainly related, but may at times provide different indications of value.
User Contributed Comments 3
| User | Comment |
|---|---|
| rodney176 | That explanation is not satifying |
| chau76 | REITS use P/FFO or P/AFFO for valuation |
| akirchner1 | This answer seems to be implied in the CFA book although it states that the relative valuation tool is more useful than an absolute valuation metric |