Which of the indicators below would make an investment in a real estate project appear to be more risky? (Please mark all correct answers) (6 Points) The revenue stream will not be immediately available but will be generated only many years in the future The project is located within a jurisdiction that has a history of expropriating real estate. The probability that no renters/buyers will be interested in the project is high. The project is situated in an area that frequently is subject to hurricanes. The market for the project is completely unsaturated, as nobody undertook a similar project in the past Compare an investment in an apartment building with investments in AAA rated mortgage bonds. Which investment would be less risky? Please explain the factors that make this investment safer. (8 Points) Your answer Investing in a high risk project necessarily yields in expectation a higher return. (2 Points) True O False Which equation would you use to calculate the future value for a lump sum investment if your investment compounds on a monthly level? (6 Points) Your answerFtisks should always be eliminated, if this is impossible, any project should be shelved immediately. [2 Points) 1rI'Il'hy is risk management an important component of dealing with risk in real live? {4 Points] 0 Risk management helps to avoid risk. 0 Risk management helps to tailor the level of risk of a project to the level of risk aversion of an investor. O Risk management allows organizations to proactively engage with risks and reduce their damage when possible. Risk management can reduce the harm when things are going wrongr it isI therefore, 0 efcient to imply a risk management program {EMF} only when the project is underperforming. What does the Risk Premium capture? [4 Points) The level of risk aversion of an investor The amount of risk that is not covered by an insurance. The impact that the risk could have on the project if realized. The difference in risk between the investment opportunity in question and a risk-free investment opportunity. 0000 Please list the four causes for risk that you think are most important [4 Points} \"Your answer Which additional sources of risk can you find in real estate investment that you cannot find in the non-real estate market (e.g., stocks)? (4 Points) O Physical elements of Risk. O Missing information on future returns. O Imprecise data for future incertainties. Unpredicted events influencing the profitability of the investment, e.g., a global pandemic