1In all the following situations, there is a focus on the "income objective" of a real estate investment except:

a.A 65-year-old planning how to use her wealth to support herself now that she is retired.

b.A pension fund trying to match revenues to its current pension payout needs.

c.A university endowment fund wanting to use gift assets to fund an annual scholarship program.

d.A 25-year-old planning to be able to buy a house in 5 years.

2If you are reviewing a DCF proforma of the investment in an operating property and the "going-out" or reversionary (or "terminal") cap rate is noticeably lower than your calculation of the "going-in" cap rate, what might be behind this situation?

a.The going-in cap rate reflected unusually challenging market conditions at the time of the acquisition.

b.The landlord thinks that she will be doing a much, much better job of managing the asset than the prior owner.

c.The outlook for NOI growth at the time of sale has improved substantially.

d.The risk conditions of the property and the economy have very much diminished between the time of purchase and sale.

e.All of the above.

f.None of the above - it is just being too optimistic about the property.