Answered: What is the effect of using appraised…

What is the effect of using appraised prices of real estate values to estimate risk when the appraisals are based on lagged information consisting of varying lengths of time lag?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 24Q: How does the size of the initial investment affect the internal rate of return on the net present...

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Concept explainers

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.

Question

What is the effect of using
appraised prices of real estate
values to estimate risk when the
appraisals are based on lagged
information consisting of varying
lengths of time lag?

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