You are considering an investment in an industrial property. Initially you defined the expected rent growth to be normally distributed with a mean of 2.5% and standard deviation of 2% and calculated your probability of reaching your expected IRR of 12.5% to be 58%. After a closer examination, due to many long leases in place, you have decided that the rent growth is better defined as being normally distributed with a mean of 2.0% and standard deviation of 1.5%. What is the probability of reaching your expected IRR of 12.5% using this new definition? Please select one answer below a. 58% - The way rent growth is defined should not affect the IRR b. Lower than 58% - because the redefined mean of rent growth is lower c. Higher than 58% - because the redefined standard deviation of rent growth is lower d. Higher than 58% - because the redefined mean of rent growth is lower e. Lower than 58% - because the redefined standard deviation of rent growth is lower
You are considering an investment in an industrial property. Initially you defined the expected rent growth to be
a. 58% - The way rent growth is defined should not affect the IRR
b. Lower than 58% - because the redefined mean of rent growth is lower
c. Higher than 58% - because the redefined standard deviation of rent growth is lower
d. Higher than 58% - because the redefined mean of rent growth is lower
e. Lower than 58% - because the redefined standard deviation of rent growth is lower
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