Title 9.4 Real Estate and Infrastructure.pdf ✅

9.04 Real Estate and Infrastructure Question 1 Compared to a brownfield infrastructure investment, a greenfield investment most likely has: A. higher levels of risk. B. lower potential returns. C. more current cash flows. Question 2 Which of the following types of alternative investments most likely provides investors the greatest income stability? A. Direct investment in farmland B. Direct investment in timberland C. Equity real estate investment trusts Question 3 An investor is seeking an alternative investment that offers historically low correlation with global equities, relatively low volatility, and current income. Which of the following most appropriately meets these requirements? A. Farmland B. Managed futures C. Publicly listed real estate investment trust Question 4 In a floating-rate mortgage on a commercial real estate property, the lender's risk compared to the borrower's risk is best described as: A. spread risk. B. interest rate risk. C. the loan-to-value ratio. Question 5 An investor seeking to benefit from the appreciation of commercial real estate would most appropriately buy: A. equity real estate investment trusts. B. mortgage real estate investment trusts. C. commercial mortgage-backed securities. Question 6 An alternative investment that provides diversification benefits and an inflation hedge while also generating consistent income is best described as an investment in: A. farmland. B. managed futures. C. a greenfield infrastructure project.
Question 7 Compared with a direct investment in real estate, investing in real estate investment trusts (REITs) most likely offers a distinct advantage regarding: A. taxes. B. degree of control. C. stability of income. Question 8 An infrastructure investor primarily concerned with market liquidity would most appropriately invest in: A. the expansion of an income-generating toll road. B. an exchange-traded fund consisting of utility companies. C. a hedge fund investing in various types of infrastructure companies. Question 9 A portfolio manager is considering adding an infrastructure investment to a pension portfolio to increase the fund's long-term expected return. Which of the following is the most appropriate investment to add to the portfolio? A. Direct brownfield investment in a power plant B. Direct greenfield investment in a toll road project C. Publicly listed master limited partnership in existing energy pipeline assets Question 10 An investor who does not seek current income from an investment in infrastructure should most appropriately: A. directly invest in a greenfield hospital project. B. own shares in an unlisted mutual fund that invests in existing toll roads. C. invest in an exchange-traded fund that consists of brownfield public utilities. Question 11 An analyst is using a real estate valuation index to estimate the value of an investment property and wishes to avoid sample selection bias. The analyst's least appropriate choice is to use a(n): A. REIT index. B. appraisal index. C. repeat sales index. Question 12 The type of infrastructure investment most likely to have the highest concentration risk is a(n): A. direct investment in a greenfield project. B. unlisted mutual fund that invests in multiple global brownfield projects. C. exchange-traded fund (ETF) made up of publicly traded infrastructure companies.
Question 13 A private equity real estate fund that primarily redevelops and repurposes shopping malls in secondary and tertiary markets is most likely structured as a(n): A. core-plus strategy fund. B. finite-life closed-end fund. C. infinite-life open-end fund. Question 14 Which of the following is most likely a limitation of using appraisal indexes to measure returns to real estate? A. Infrequent trading B. Understated volatility C. Sample selection bias