All of the following are fundamental causal determinants of cap rates in the property asset market, except:
A) The opportunity cost of capital (as determined in the capital market).
B) The expected growth in property rents (as determined in the space market).
C) The risk perceived for the property (as determined in the space and capital market).
D) The net income divided by the property price.

Question

Quizplus · Accepted Answer

Cap rates are influenced by the opportunity cost of capital, expected growth in property rents, and the perceived risk of the property. The net income divided by the property price is actually the definition of a cap rate, not a determinant of it.

All of the Following Are Fundamental Causal Determinants of Cap