Why Does Including REITs in a Portfolio Containing S&P 500

question 11

Multiple Choice

Why does including REITs in a portfolio containing S&P 500 securities produce diversification benefits?

• A)Real estate investment returns are highly correlated with returns for stocks
• B)Real estate investment returns are not highly correlated with returns for stocks
• C)Real estate investment returns are not subject to federal income taxes
• D)Real estate investment returns do not change much from year to year

---

Definitions:

High Self-monitoring

A personality trait characterized by a high level of sensitivity to social cues and adaptability in behavior depending on the situation.

Emotional Stability

A personality trait characterized by the ability to remain calm, composed, and steady, especially under stress or during challenging situations.

External Locus

A belief that one's life events are predominantly controlled by external forces or circumstances beyond one's personal control.

Short Tenure

A brief period of time someone holds a particular title, office, or position.