Jefferson Davis has invested in something that acts like a mutual fund and that invests in hospitals all over the country.He knows there are federal laws that require this type of investment to distribute at least 90 percent of the income to shareholders and that requires there be at least 100 shareholders.What type of investment has Jefferson made?

Question

Quizplus · Accepted Answer

Jefferson has invested in a Real Estate Investment Trust (REIT) which functions like a mutual fund and invests in hospitals all over the country. REITs are required by federal law to distribute at least 90 percent of their income to shareholders and must have at least 100 shareholders to qualify as a REIT. Foreclosures, limited partnerships, participation certificates, and direct investments do not necessarily have these requirements.

Jefferson Davis Has Invested in Something That Acts Like a Mutual