CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

An office building has exterior and interior walls partially constructed with concrete block and wood frame and stucco. However, the market does not recognize superior construction of concrete block with increased rents, hence the excess cost is super-adequate. This is an example of:
A. Physical deterioration.
B. Functional obsolescence.
C. Economic obsolescence.
Explanation: Incurable functional obsolescence.

User Contributed Comments 3

User Comment
alejandroc Did not understand this question. Explain more!
arjnath The additional superior concrete block doesnt get valued by Increased rents as the market deems it not to have any additional functional use or value
Hence functional obsolescence
BradRoss is this not economic obsolescence?
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