What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Alternative Investments
4. Real Estate practice questions
4. Real Estate is part of CFA Level I Alternative Investments. Alternative Investments questions emphasize private capital, real estate, infrastructure, natural resources, hedge funds, digital assets, and performance measurement. Use this page to review the controlling ideas, then work through 9 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Alternative Investments
4. Real Estate
A publicly traded real estate investment trust most likely provides investors with:
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4. Real Estate
The real estate feature that most directly means no two properties are exactly identical is:
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4. Real Estate
A fully leased, high-quality office property in a major market with modest leverage and stable income is most consistent with a:
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4. Real Estate
A property has potential gross rental income of USD1,200,000, expected vacancy and collection losses of 5% of potential gross income, and operating expenses of USD420,000. Using a capitalization rate of 6.5%, the indicated property value is closest to:
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4. Real Estate
An investor buys a property for USD10 million using USD4 million of equity and USD6 million of interest-only debt. During the year, the property produces NOI of USD550,000, interest expense is USD360,000, and the property value rises to USD10.8 million. Ignoring transaction costs and taxes, the investor equity return is closest to:
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4. Real Estate
An analyst is evaluating a retail property with high exposure to a single tenant whose lease expires next year. The most relevant property-specific risk is:
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4. Real Estate
A property generates expected annual NOI of USD900,000. Market capitalization rates decline from 7.5% to 6.0% while NOI is unchanged. The property value increase is closest to:
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4. Real Estate
A private real estate fund reports quarterly values based mainly on appraisals, while a listed REIT reports prices daily in the public market. The private fund's reported return series is most likely to show:
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4. Real Estate
A real estate allocation is expected to provide inflation sensitivity because rents can reset over time and replacement costs may rise with the price level. The most accurate caveat is that:
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