Final answer:
Investment in real estate offers both financial and nonfinancial returns. It is not highly liquid and is not exempt from taxation.
Step-by-step explanation:
Investment in real estate is attractive to investors because it offers both a financial and nonfinancial return. When you buy a house to live in, part of the return on your investment comes from your consumption of housing services. Additionally, there is the possibility of a capital gain from selling the house in the future for more than you paid for it.
However, it is important to note that real estate investment has some drawbacks. It is not a highly liquid investment, meaning it may take considerable time and effort to sell a house and turn your capital gain into cash. Furthermore, it is not exempted from taxation, unlike some other investments.
Therefore, options B) It permits a high degree of financial leverage, C) It is exempted from taxation, D) It requires very low investment, and E) It is highly correlated with the stock markets are incorrect. The correct answer is A) It is a highly liquid investment.