CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Which statement is true?
A. Different valuation approaches are likely to result in the same value if done properly.
B. The terminal cap rate is always the same as the going-in cap rate at the time of the appraisal, since they are both derived using the same formula.
C. Real estate has both stock-like and bond-like characteristics.
Explanation: A is false. They are unlikely to result in the same value as they are based on different assumptions and availability of data.

B is false. They are not necessarily the same. The terminal cap rate depends on expected discount rate and growth rate at the time of sale.

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