CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Real estate markets are often considered inefficient. Which characteristic of real estate is likely the primary reason for this?
A. High transaction costs
B. Information asymmetry
C. High unit value
Explanation: In contrast, public stock markets are much more efficient - information is efficiently disseminated among market participants, and those with material non-public information are not permitted to trade upon the information. In the real estate markets, information is king, and can allow an investor to see profit opportunities that might otherwise not have presented themselves.

User Contributed Comments 2

User Comment
janis36 High transaction costs are equally valid reason.
BradRoss agreed janis36
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