Case 1 Real Estate or Stocks?

Junhee Chang, a senior research analyst in Laramie, Wyoming, has bought and sold high-technology stocks profi tably for years. Lately some of her stock investments have done poorly, including one company that went bankrupt. Emily, a longtime friend at work, has suggested that the two of them invest in real estate together because property values in some neighborhoods have been rising. Emily has looked at three small offi ce buildings and some residential duplexes as possible investments.

(a) Contrast the wisdom of investing in commercial offi ce buildings versus the attraction of investing in residential properties.