n NISM Certifications
X NISM Series X
Medium

The main objective of a Real Estate Investment Trust (REIT) is to invest in a diversified portfolio of multiple income-producing real estate properties, thereby spreading risk across various property types.

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To invest in infrastructural projects

  2. B

    To invest in a big deal of real estate

  3. C

    To invest in at least seven properties of real estate to spread the risk

  4. To invest in multiple properties of real estate to spread the risk

    Correct answer

Why this is the answer

REITs pool investors’ funds to acquire a diversified portfolio of real estate assets, reducing risk through diversification.

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