10
QuizMultiple Choice

Real Estate Investments

Question 10 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

In which way do REITs resemble mutual funds?

Answer
A
Money is invested in a fund that is controlled by a board, and dividends are paid out to the investors.
B
Both mutual funds and REITs provide the investor with a monthly income.
C
Both REITs and mutual funds are deferred until after retirement.
D
Mutual funds and REITs are involved with investing money in real estate.

Explanation

REITs and mutual funds both pool investors’ money into a fund managed under the oversight of a board, and they can distribute earnings to investors as dividends. Monthly income is not guaranteed for both, and mutual funds are not necessarily deferred until retirement. Mutual funds also invest in many kinds of assets, not just real estate, so choice A is the best match.

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