Consider the following about Real Estate Investment Trusts REITs 1 They allow individual investors t...........

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Consider the following about Real Estate Investment Trusts (REITs).

1. They allow individual investors to make investments in small amounts like a mutual fund.

2. They are not allowed to pay dividends to unit holders.

3. They are allowed to own or lease out property and acquire rent from it.

Select the correct answer using the codes below.

1 and 2 only

2 and 3 only

1 and 3 only

1,2 and 3

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Explanation:

statement 1: A real estate investment trust (REIT) is a platformthat allows investors to make securitised real estate investments in smallamounts. It works much like a mutual fund, pooling funds from variousinvestors into one basket.
Real estate is a physical asset. Through REITs this asset is broken into severalparts and converted into a paper investment, or securitised.
Statement 2 and 3: Globally, there are two major kinds of REITs: equity andmortgage.
Equity REITs own or develop and hold the properties, either individually orthrough special purpose vehicles (SPVs). Hence, they are referred to as equityREITs. Their income is in the form of rent received from leasing the property.This rent gets transferred to unit holders as dividend.