Question

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Using the above information, which kind of investor would likely turn the greatest profit in this market, given that each of
them purchased a house in this area at year 0?
a. A long-term investor, who wishes to hold onto the house for an extended period and rent it out in
the meantime.
b. A house flipper, who will sell the house as soon as the market increases its value.
C. A moderate-term investor, who will sell the house once it reaches a certain price.
d. A cautionary investor, who will sell the house in order to minimize losses as soon as the prices
begin to drop

Answer 1

A. A long-term investor, who wishes to hold onto the house for an extended period and rent it out in the meantime.

edge 2021

Answer 2

The correct answer is A. A long-term investor, who wishes to hold onto the house for an extended period and rent it out in the meantime.

Explanation:

This kind of investment is particularly attractive for long-term investors that are seeking for a predictable and steady return and that are not looking for a short-term big shot. As it is mentioned in the description, for taking full advantage the investor knows in advance that the property will also be rented while it increases its value.