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Chartered Investment Manager (CIM) Practice Exam · Question

Which of the following would be considered a 'direct' real estate investment?

Direct real estate investment involves purchasing physical property, such as an apartment building, commercial office space, or undeveloped land, with the expec

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Question: Which of the following would be considered a 'direct' real estate investment?

Answer options:

  • Purchasing shares in a Real Estate Investment Trust (REIT).
  • Investing in a publicly traded real estate development company. ✅ Buying an apartment building for rental income.
  • Holding a derivative contract based on a real estate index.

Correct answer: Buying an apartment building for rental income.

Explanation: Direct real estate investment involves purchasing physical property, such as an apartment building, commercial office space, or undeveloped land, with the expectation of generating income or capital appreciation. REITs and public real estate companies are indirect forms of real estate investment.

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