1. Because the opportunity cost of equity capital changes over time, should long-term and short-term commitments be evaluated using different opportunity costs? Explain why or why not.
2. Why do some investors use a discount rate higher than their cost of capital?
3. Because diversification, appropriately pursued, reduces risk, should investors extend their diversification until all diversifiable risk has been eliminated? Why or why not?
4. How might risk be shifted by the wording of tenant leases? How might it be avoided by choice of organizational entity?