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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. OB. Prices will stay the same. OC. Prices will fall. OD. Prices will rise first and then fall.

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. OB. Prices will stay the same. OC. Prices will fall. OD. Prices will rise first and then fall.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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.
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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