While There Are Several Conventional Approaches Used to Estimate the Market

question 8

Multiple Choice

While there are several conventional approaches used to estimate the market value of real estate, which of the following is typically considered the most reliable approach?

• A) Income approach
• B) Sales comparison approach
• C) Cost approach
• D) Investment approach

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Definitions:

SML

Stands for Security Market Line, which represents the expected return of a market security as a function of its systematic, non-diversifiable risk.

Coefficient of Variation

A statistical measure that assesses the relative variability of data points around the mean, indicating the level of dispersion.

Standard Deviation

A statistical measure of the dispersion or variability of a set of values, often used in finance to quantify the risk associated with an investment's return.

Perfectly Positively Correlated

A relationship between two variables where they move in the same direction at the same time with a correlation coefficient of +1.