Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Transcribed Image Text:QUESTION 16
The Federal Reserve had a meeting where they announced plans to lower
interest rates. Suppose NOIs, and expected growth rates for NOIs on properties
are expected to remain the same. Using your knowledge of cap rates, what does
this imply will happen to property prices?
(Hint: how are cap rates related to r and g?)
A. Prices will rise.
B. Prices will stay the same.
OC. Prices will fall.
OD. Prices will rise first and then fall.
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