Chartered Financial Analyst Level 2
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42 Compared to private real estate vehicles, REITs most likely provide greater:
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Last updated: January 20, 2026 at 14:03A
transparency.
B
pricing stability.
C
control over the underlying properties.
Explanation:
REITs vs Private Real Estate Vehicles Comparison
Transparency (Option A) is the key advantage that REITs provide over private real estate vehicles:
Why REITs offer greater transparency:
- Public Reporting Requirements: REITs are publicly traded and must file regular financial reports (10-K, 10-Q) with the SEC
- Standardized Financials: REITs report standardized metrics like FFO (Funds from Operations) and AFFO (Adjusted Funds from Operations)
- Regular Disclosure: Property-level information, occupancy rates, rental income, and portfolio composition are regularly disclosed
- Analyst Coverage: Public REITs receive extensive analyst coverage and research
Comparison with other options:
- Pricing stability (Option B): REITs actually tend to have more price volatility due to stock market fluctuations
- Control over underlying properties (Option C): Private real estate vehicles typically offer investors more direct control over property management and investment decisions
Therefore, transparency is the most significant advantage that REITs provide compared to private real estate vehicles.
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