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Portfolios 407: Real Estate Investment Trusts (REITs)

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1.
Investors willing to bear a certain amount of risk may receive good yields through a real estate investment trust.
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True. REITs can provide a high yield and a hedge against inflation for investors comfortable with a certain amount of risk.
2.
A real estate investment trust that invests heavily in equity may offer the investor _______.
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Increased stability. REITs that invest in equity are generally less volatile than those that invest primarily in mortgage loans.
3.
The Tax Reform Act of 1986 expanded the powers of real estate investment trusts by _______.
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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.
4.
A real estate investment trust is most likely to invest in _______.
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Factory outlet malls. About one fifth invest in retail enterprises, including shopping centers and factory outlet malls. Lower numbers of REITS also invest in many other different types of real estate, such as residential developments, hotels and resorts, self-storage businesses, and health-care facilities.
5.
The number of mutual funds investing in REITs totals _______.
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Close to 80. NAREIT's Website lists close to 80 mutual funds that invest in REITs.