Question
7) What is the multiple of a property that is selling for a CAP of 7.5%? 8) What is the total risk premium demanded by
7) What is the multiple of a property that is selling for a CAP of 7.5%?
8) What is the total risk premium demanded by an investor that agrees to purchase a particular property for a CAP of 9% if the investor expect inflation to be 2% at a time that the treasury rates are 6%?
9) What is the general relation between the total risk premium and prices of investment real estate properties?
10) Under what conditions the average CAP rate in the market will likely be below the rate of 10-year treasuries?
This is part of an assignment for a real estate investment class; Im stuck on these questions....
Any help would be appreciated!
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