What Is the Expected Return for a Real Estate Investment

question 25

Multiple Choice

What is the expected return for a real estate investment fund with a Beta of 1.87,given a risk free rate of 2.7% and an expected return of 11.2% for the market?

• A)18.6%
• B)11.2%
• C)15.9%
• D)2.7%

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Definitions:

Inflation Level

The pace at which the average price level of goods and services ascends, diminishing the value of money.

Base Year

A specific year against which economic or financial data is measured and compared.

Chain-Weighted Index

An economic measure that accounts for changes in both prices and quantities of goods and services over time, adjusting the weightings to better reflect reality.

Laspeyres Index

A price index used to measure the change in the cost of acquiring a fixed basket of goods and services of the same type and quantity over time.