- CFA Exams
- CFA Level I Exam
- Study Session 17. Portfolio Management (2)
- Reading 46. Economics and Investment Markets
- Subject 6. Commercial Real Estate
CFA Practice Question
The key difference between the discount rates applied to the cash flows of equities and commercial real estate properties is the existence of a(n) ______.
A. credit premium
B. inflation premium
C. liquidity premium
Explanation: The liquidity premium provides additional compensation for the risk that the real estate investment may be very illiquid in bad economic times.
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