Why Might It Be Argued That Corporations Do Not Have

question 27

Multiple Choice

Why might it be argued that corporations do not have a comparative advantage when investing in real estate as a means of diversification from the core business?

• A)Corporations cannot react as quickly as individual investors to changes in market conditions
• B)Corporations do not typically hold real estate in a large number of geographic areas and may not hold a variety of different types of properties
• C)Corporations often use property managers who do not understand financial markets
• D)Diversification dilutes a corporations risk-return profile and does not provide an advantage to corporations

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Definitions:

Environmental Concerns

Issues related to the protection of the natural environment due to pollution, depletion of resources, and loss of biodiversity.

Core Culture

The fundamental beliefs, values, and practices that are central and intrinsic to an organization or group, shaping its identity and ways of operating.

Task Environment

The immediate external environment that affects an organization's operations, including competitors, customers, suppliers, and regulations.

Stakeholders

Individuals or groups that have an interest in the success and outputs of an organization.