Real Estate Investment Strategies – Spring 2026
Midterm Exam
Professor Vineet Bedi, CFA
Name Darwin Gray
Student ID: N16869035
This is a take-home exam.
You may use course materials to answer questions or the web for research.
You must complete this individually; collaboration between students is not
permitted.
If you are having trouble understanding a particular question, you may email me,
and I will attempt to clarify what I am asking.
You have until Friday, April 3, 2026 by 11:59 PM ET to complete and submit this
exam. Please submit it via Assignments on NYU Brightspace for this course with
your excel backup attached.
I will endeavor to grade it ASAP and turn around grades thereafter.
Part I: Circle the letter of your answer (40%, 2.5% each)
There is only one correct answer.
1) The MSCI US REIT Index (^RMZ) is one of the two major benchmark indices for
the REIT industry. The other most closely watched index measuring the stock
performance of U.S. public real estate companies is
a) Russell REIT Index
b) FTSE NAREIT U.S. Real Estate Index
c) Real Capital Analytics REIT Index
d) New York Post Real Estate Performance Index
2) The reconciliation from GAAP net income to FFO does not include
a) Adding back depreciation of real estate assets
b) Adding back amortization of capitalized items
c) Deducting amortization of debt
d) Eliminating gains or losses from the sale of property or discontinued
operations
3) According to Green Street, AFFO is a superior metric to FFO in measuring equity
REIT cash flow. Green Street Advisors identifies the major adjustment to FFO as
the
a) Deduction from FFO of recurring capital expenditures required to keep a
property competitive
b) Deduction from FFO of gains or losses from discontinued operations.
c) Deduction from FFO of the book value of Taxable REIT Subsidiaries.
d) Marking to market the company’s outstanding preferred stock.
4) Which of the following is not a type of REIT?
a) Mortgage REIT
b) Equity REIT
c) Hybrid REIT
1
, d) Commercial Mortgage REIT
5) Which one of these is a requirement for a US REIT to maintain its tax-exempt
status?
a) The company must have 100 or more shareholders.
b) The company’s shares are traded on a major exchange.
c) The company must distribute, as dividends, at least 95% of the company’s
FFO to shareholders.
d) The company’s annual report must calculate the reconciliation of FFO in
accordance with the NAREIT definition of FFO.
6) Many of the REITs going public in the late 1960s and early 1970s were
commercial bank sponsored mortgage REITs engaged in the business of lending
on construction and development of commercial real estate. Most of these “C&D”
REITs failed because of
a) The Tax Reform Act of 1986
b) The severe and sudden inflation caused by OPEC embargo and the
subsequent recession lasting most of the decade of the 1970s.
c) The bursting of the “Japanese bubble” and the consequent “Lost Decade”
d) The effects of the Basel Accords
7) AFFO (CAD/FAD) is intended to most approximate cash flow. The widest
difference between FFO and AFFO will occur for equity REITs that own and
operate
a) Timberland
b) Office buildings
c) Self-storage facilities
d) Net leased properties
8) If an equity REIT pays a dividend in excess of 100% of its taxable income, that
portion of the dividend will be deemed to be a return of capital to the shareholders,
and, as such
a) Will be tax exempt
b) Will be tax deferred by reducing the tax basis of the shareholders
c) Will be taxed as a capital gain
d) Will be taxed immediately as ordinary income
9) The primary attraction of non-exchange traded equity REITs is
a) Generally, management that is considered superior to listed REITs
b) More detailed coverage by the analyst community
c) Higher dividends and lower price correlations to publicly listed companies
d) None of the above
10) Which of the following class of investors owns the largest percentage of US
publicly traded REIT shares?
a) Hedge funds
b) Mutual funds
c) Individual retail investors
d) Sovereign wealth funds
2
Midterm Exam
Professor Vineet Bedi, CFA
Name Darwin Gray
Student ID: N16869035
This is a take-home exam.
You may use course materials to answer questions or the web for research.
You must complete this individually; collaboration between students is not
permitted.
If you are having trouble understanding a particular question, you may email me,
and I will attempt to clarify what I am asking.
You have until Friday, April 3, 2026 by 11:59 PM ET to complete and submit this
exam. Please submit it via Assignments on NYU Brightspace for this course with
your excel backup attached.
I will endeavor to grade it ASAP and turn around grades thereafter.
Part I: Circle the letter of your answer (40%, 2.5% each)
There is only one correct answer.
1) The MSCI US REIT Index (^RMZ) is one of the two major benchmark indices for
the REIT industry. The other most closely watched index measuring the stock
performance of U.S. public real estate companies is
a) Russell REIT Index
b) FTSE NAREIT U.S. Real Estate Index
c) Real Capital Analytics REIT Index
d) New York Post Real Estate Performance Index
2) The reconciliation from GAAP net income to FFO does not include
a) Adding back depreciation of real estate assets
b) Adding back amortization of capitalized items
c) Deducting amortization of debt
d) Eliminating gains or losses from the sale of property or discontinued
operations
3) According to Green Street, AFFO is a superior metric to FFO in measuring equity
REIT cash flow. Green Street Advisors identifies the major adjustment to FFO as
the
a) Deduction from FFO of recurring capital expenditures required to keep a
property competitive
b) Deduction from FFO of gains or losses from discontinued operations.
c) Deduction from FFO of the book value of Taxable REIT Subsidiaries.
d) Marking to market the company’s outstanding preferred stock.
4) Which of the following is not a type of REIT?
a) Mortgage REIT
b) Equity REIT
c) Hybrid REIT
1
, d) Commercial Mortgage REIT
5) Which one of these is a requirement for a US REIT to maintain its tax-exempt
status?
a) The company must have 100 or more shareholders.
b) The company’s shares are traded on a major exchange.
c) The company must distribute, as dividends, at least 95% of the company’s
FFO to shareholders.
d) The company’s annual report must calculate the reconciliation of FFO in
accordance with the NAREIT definition of FFO.
6) Many of the REITs going public in the late 1960s and early 1970s were
commercial bank sponsored mortgage REITs engaged in the business of lending
on construction and development of commercial real estate. Most of these “C&D”
REITs failed because of
a) The Tax Reform Act of 1986
b) The severe and sudden inflation caused by OPEC embargo and the
subsequent recession lasting most of the decade of the 1970s.
c) The bursting of the “Japanese bubble” and the consequent “Lost Decade”
d) The effects of the Basel Accords
7) AFFO (CAD/FAD) is intended to most approximate cash flow. The widest
difference between FFO and AFFO will occur for equity REITs that own and
operate
a) Timberland
b) Office buildings
c) Self-storage facilities
d) Net leased properties
8) If an equity REIT pays a dividend in excess of 100% of its taxable income, that
portion of the dividend will be deemed to be a return of capital to the shareholders,
and, as such
a) Will be tax exempt
b) Will be tax deferred by reducing the tax basis of the shareholders
c) Will be taxed as a capital gain
d) Will be taxed immediately as ordinary income
9) The primary attraction of non-exchange traded equity REITs is
a) Generally, management that is considered superior to listed REITs
b) More detailed coverage by the analyst community
c) Higher dividends and lower price correlations to publicly listed companies
d) None of the above
10) Which of the following class of investors owns the largest percentage of US
publicly traded REIT shares?
a) Hedge funds
b) Mutual funds
c) Individual retail investors
d) Sovereign wealth funds
2
