n NISM Certifications
V-A NISM Series V-A
Medium

Identify the CORRECT statement(s) with respect to investments in Real Estate Investment Trusts (REITs).

Practice question from NISM Series V A - Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    REITs are exposed to risks of lower-than-expected distributions

  2. B

    The distributions by the REIT will not be based on the net cash flows available for distribution

  3. Both of the above are correct

    Correct answer

  4. D

    None of the above

Why this is the answer

REITs are exposed to various risks, including the risk of lower-than-expected distributions. Distributions are based on the net cash flows from the properties in the REIT's portfolio.

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