CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

All of the following statements about real estate investment trusts (REITs) are generally true EXCEPT:

A. The shares of REITs are traded only on the New York Stock Exchange.
B. REITs yield a return at least 1-2 percentage points above money market funds and about the same return as high-grade corporate bonds.
C. REITs are required by law to pay out 90% of their income as dividends.
D. REITs must keep at least 75% of their assets in real estate investments.
Correct Answer: A

User Contributed Comments 6

User Comment
stefdunk I thought the law required REITS to pay out 90%. Can someone please verify this?
johnny This is not explained in the textbook so why worry?
johntan1979 stefdunk is right. It WAS 95% but has been lowered to 90%. On December 17, 1999, US Congress and the President signed into law the REIT Modernization Act (RMA), which goes into effect in 2001 and includes the change in payout requirements.
Shaan23 How do you guys know this not bothering.
schweitzdm Yes it's 90%. The only reason I know is because I wrote a report on $AMT. Fun fact: if they fail to pay enough out as a dividend then they face income taxes.
khalifa92 google dude.
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