Which of the following should be true about the ex ante micro-level performance attribution (IRR parsing components) of this property investment?
A) The overall IRR will likely be negative due to a very large negative yield-change (YC) component.
B) The overall IRR will likely be positive due to positive components in all three performance attributes (IY, CFC, & YC).
C) The overall IRR will likely be negative, but at least the yield-change (YC) component will be positive.
D) The overall IRR will likely be positive due largely to the initial yield component (IY), but the yield-change (YC) component will be negative.
E) None of the above.

Question

Quizplus · Accepted Answer

The overall Internal Rate of Return (IRR) for a property investment can be positive even if one component, such as the yield-change (YC) component, is negative, as long as other components like the initial yield (IY) are strong enough to outweigh the negative impacts. This reflects the multifaceted nature of real estate investment returns, where various factors contribute to the final outcome.

Which of the Following Should Be True About the Ex