SIE practice questionmediumREITs — Listed vs Non-Listed
Which statement about non-traded REITs is TRUE?
- ANon-traded REITs are not listed on an exchange and are illiquid, often with high upfront fees✓ Correct answer
- BNon-traded REITs are riskier but exempt from all SEC regulations
- CNon-traded REITs are only available to institutional investors
- DNon-traded REITs offer the same liquidity as listed REITs
Explanation
Why A — Non-traded REITs are not listed on an exchange and are illiquid, often with high upfront fees
Non-traded (non-listed) REITs are NOT traded on stock exchanges, making them illiquid. They typically carry high upfront fees (sometimes 12-15% of the investment in commissions and fees), have limited redemption programs, and share values may be difficult to determine. They ARE still registered with the SEC (C is wrong) and are available to retail investors who meet suitability requirements (D is wrong).
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