A property that produces a level of NOI of $400,000 per year is expected to be sold in year 5 for $2,000,000. If the property was purchased for $2,000,000, what percent of the IRR can be attributed to the operating income only? Does this imply that the property is more or less risky?Why? Provide a short answer.

1. 37.9%, more risky
2. 37.9%, less risky
3. 59.8%, more risky
4. 59.8%, less risky