CFA CFA Level 1 Question of the Week – Alternative Investments

Question of the Week – Alternative Investments

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      What’s the correct answer please?

    • Avatar of AdaptPrepAdaptPrep
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        The inflation hedge
        is the advantage to look for. When inflation hits the market, property values
        tend to increase accordingly. What you need to be careful for, though, is that
        this hedge isn’t as effective if there is a long-term, fixed rent agreement.

        Here’s why other potential answers aren’t accurate:

        Little work required
        to hold properties long-term
        — incorrect. Maintenance is required, and
        while a single handyman might be able to take care of a residential house, a
        team is required for most commercial properties.

        No need to worry about
        governmental regulations
        — also not true. You also need to know the state
        and local government regulations.

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