- CFA Exams
- CFA Level I Exam
- Study Session 15. Alternative Investments
- Reading 39. Private Real Estate Investments
- Subject 5. The cost and sales comparison approaches to valuation
CFA Practice Question
A loss in value because of poor floor plan is an example of:
B. Functional obsolescence.
C. external obsolescence.
A. Physical deterioration.
B. Functional obsolescence.
C. external obsolescence.
Correct Answer: B
Functional obsolescence can be caused by out of date, poor floor plan, lack of modern appliances, out of style architecture.
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