Question

The main difference between exchange-traded REITs vs. non-traded REITs is the levels of liquidity:

A) Exchange-traded REITs and non-traded REITs have similar liquidity levels.
B) Exchange-traded REITs are more liquid than non-traded REITs.
C) Non-traded REITs are more liquid than exchange-traded REITs.
D) Both exchange-traded and non-traded REITs have low liquidity.

Answer 1

Exchange-traded REITs are more liquid than non-traded REITs.

Step-by-step explanation:

The main difference between exchange-traded REITs and non-traded REITs is their levels of liquidity.

Exchange-traded REITs are listed on stock exchanges and can be bought and sold throughout the trading day, similar to stocks. This makes them more liquid as investors have the ability to easily enter or exit their positions.

On the other hand, non-traded REITs are not listed on exchange and are typically sold through brokers or financial advisors. They have limited liquidity because they have specific periods known as liquidity events where investors can redeem their shares, but this may come with restrictions or penalties.

In summary, option B, Exchange-traded REITs are more liquid than non-traded REITs, is the correct answer.