Series 7 practice questionmediumDirect Participation Programs 450
Which risk is especially relevant to a real estate DPP?
- ACall risk on Treasury bills
- BCurrency peg risk on ADR custody banks only
- COdd-lot execution risk
- DVacancy and local property market risk✓ Correct answer
Explanation
Why D — Vacancy and local property market risk
Real estate DPP performance can be affected by rents, occupancy, financing, and local market conditions. Those factors can materially change cash flow and asset value.
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