Complicated by unique characteristics of real estate markets

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1. Hayek Corporation has a 0.4 probability of a return of -0.20, a 0.4 probability of a rate of return of 0.07, and the remaining probability of a -0.40 rate of return. What is the variance in the expected rate of return of Hayek Corporation?

2. In contrast to stock markets, estimating the market value of real estate is complicated by the unique characteristics of real estate markets. Explain.

 

Reference no: EM132005649

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