Which of the following is a potential benefit of investing in REITs?

Solution

One potential benefit of investing in REITs is the potential for high dividend yields. REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. As a result, many REITs offer high dividend yields, which can be attractive to income-seeking investors. However, it's important to note that investing in REITs also carries some risks. For example, REITs are subject to interest rate risk, which means that rising interest rates can lead to a decrease in the value of the REIT's assets and a decrease in the REIT's share price.