22. One of the key points in understanding the positive aspect of REIT inclusion in a portfolio is that of a. High growth potential b. Greater volatility with accompanying potential for greater return c. Comparable investment profile similar to a publicly traded tech stock d. fairly low correlations with those other investable and publicly traded asset classes 23. Net Asset Value (NAV) can be defined as a. The net market value of all of a company's assets, including its properties, after subtracting all its liabilities and obligations. b. The equivalent of cash flow after deprecation is added back in c. The income before interest or depreciation deductions d. A valuation method that assumes the PV of expected future dividends is the value of the stock 24. Some REIT investors reject NAV analysis and consider it flawed because a REIT's true market value isn't based only on its property values. They argue that an NAV approach ignores the REIT's value as a business enterprise for the following reasons: a. Because REITs are rarely liquidated, their NAVs are not terribly relevant. If investors wanted to buy only properties, they say, they would do so directly (i.e. Private) b. These REIT investors share a philosophy with common stock investors, who want to determine a business enterprise value. Those investors use price-to- earnings (P/E) ratios, or multiples, to value and compare regular common stocks c. Management's ability to create value is neglected with the opposite viewpoint being that a passive investment in commercial real estate assets would be equal in return profile with no recognition of the value found in the Firm as a going concern d. All of the above 25. For the most part, general investment characteristics of REITs reflect a profile similar to a. a Hybrid of Bonds and Stocks. b. a Growth stock. c. US Treasury. d. private real estate