1. As the degree of risk and uncertainty associated with the income potential of property increases, which of the following will result?
A higher yield rate will mean a higher value.
A higher yield rate will mean a lower value.
A lower yield rate will mean a higher value.
A lower yield rate will mean a lower value.
2. If the market value cap rate (yield) on a certain type of property is 10%, and you expect the property to appreciate at 1.5% per year, what discount rate (total return) should be applied to determine the market value in a multi-year DCF analysis?
3%
10%
11.5%
13%