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The Donaldson have received advice from two sources as to how to invest the $12,500 of sales proceeds from the present portfolio during the next
The Donaldson have received advice from two sources as to how to invest the $12,500 of sales proceeds from the present portfolio during the next 3-7 years in order to meet the costs of Matthew's college education. One person suggested buying a small piece of unimproved real estate. The other has suggested investing in a real estate investment trust (REIT).
Match the type of real estate investment (A or B) with each of the investment characteristics below:
A. Purchase of a piece of unimproved real estate
B. Investment in REIT
- Lower degree of liquidity (A or B?)
- Higher transfer costs (A or B?)
- Higher degree of diversification (A or B?)
- Lower opportunity for dollar cost averaging (A or B?)
- Lower degree of potential legal liability (A or B?)
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