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Suppose the Riskfree Rate of Return Is 7%, and the Expected

Question 1

Multiple Choice

Suppose the riskfree rate of return is 7%, and the expected total return on the property free & clear is 11%, and you have a target total expected return of 15%. Assuming you can borrow at the riskfree rate, what Loan/Value ratio must you obtain for this real estate investment to meet your target expected return?


A) 0%
B) 25%
C) 50%
D) 75%
E) 80%

Correct Answer:

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