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1.
A real estate investment trust is most likely to focus on the area of _______.
Equity. More than 90 percent of REITs invest in equity; smaller numbers invest in mortgage loans or a combination of equity and mortgage loans.
2.
One disadvantage of investing in a real estate investment trust is ______.
Low returns due to decreased mortgage interest rates. REITs that invest in mortgage loans can post poor performances following drops in interest rates.
3.
The number of mutual funds investing in REITs totals _______.
Close to 80. NAREIT's Website lists close to 80 mutual funds that invest in REITs.
4.
The Tax Reform Act of 1986 expanded the powers of real estate investment trusts by _______.
Allowing them to manage and operate real estate developments. Prior to the Tax Reform Act of 1986, REITs could own real estate, but they could not manage or operate it.
5.
A real estate investment trust that invests heavily in equity may offer the investor _______.
Increased stability. REITs that invest in equity are generally less volatile than those that invest primarily in mortgage loans.
