- 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
Which approach is likely to set the upper limit to the value of a property?
B. Cost approach.
C. Sales comparable approach.
A. Income approach.
B. Cost approach.
C. Sales comparable approach.
Correct Answer: B
It is assumed that an investor would never pay more than the cost to buy land and develop a comparable building.
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