The Free Enterprise System Quick Check

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Question
Skylar is looking to purchase real estate as an investment using all of her available funds, but she has several concerns. Which of the following concerns are valid from an investment standpoint?(1 point)
Responses

She might lose her investment funds because real estate is notoriously risky.
She might lose her investment funds because real estate is notoriously risky.

She might regret the purchase because she would not want to live on the property herself.
She might regret the purchase because she would not want to live on the property herself.

She might be disappointed because real estate usually offers modest returns.
She might be disappointed because real estate usually offers modest returns.

She might miss a better investment opportunity because real estate is not particularly liquid.

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
14 hours ago

All of Skylar's concerns are valid from an investment standpoint. Here’s a brief explanation for each:

  1. Risk of Losing Investment Funds: Real estate can be risky due to market fluctuations, property devaluation, and other unforeseen circumstances that can lead to loss of investment.

  2. Regret Over Living Situation: If Skylar purchases a property solely as an investment and later develops a desire to live there, she may experience regret if she doesn't want to reside in the property.

  3. Modest Returns: While real estate can appreciate over time, the returns can be more modest compared to other investment opportunities. This may lead to disappointment if she expected higher returns.

  4. Liquidity Concerns: Real estate is not as liquid as other investments, like stocks. If Skylar needs to quickly access her investment funds, she might find it challenging to sell the property quickly without losing money.

Each of these concerns reflects potential risks associated with real estate investment.