What type of risk is eliminated with diversification

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In order to diversify their portfolio, real estate investors should have exposure to different real estate property types, classes and geographic locations.

a. Is it more difficult to hold a diversified direct real estate investment portfolio compared to a diversified stock portfolio? Why?

b. What is a common alternative to holding a direct real estate investment portfolio that provides investors diversification with ease?

c. What type of risk is eliminated with diversification? What type of risk remains?

d. Is the benefit of diversification when applied to real estate smaller or larger than the benefit of diversification when applied to a stock portfolio? Briefly explain.

Reference no: EM132816275

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