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25 Cards in this Set
- Front
- Back
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Spot transaction |
Purchase of foreign currency for which the time of agree of the exchange rate and time of delivery of foreign currency is the same |
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Forward transaction |
The purchase of foreign currency for which the time of agreement of the exchange rate and time of delivery of foreign currency is different |
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Public private partnership |
Private and public sector jointly realize a project to create a win win for both parties |
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Five unique characteristics of real estate |
Durability, heterogeneity, immobility, high transaction costs, long time delays |
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Space market |
The market where the supply of landlords and demand of tenants meet each other |
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Why is the real estate supply curve inelastic? (except when there is a lot of vacancy) |
Supply cannot easily be adjusted, shifts in demand lead to substantial changes in rent |
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What does the stock of real estate supply consist of? |
Existing stock in the previous period, flow of new development in the current period |
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What is the equilibrium rent? |
Where real estate supply (Q) = real estate demand (D) |
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Investment market |
The market where investors are looking for properties to invest in |
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The value of a property is based on : |
1 discounted (Expected) cash flows 2 the desired yields for real estate that are created in the investment market |
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What is yield? |
Yield = rental income ÷value of the property |
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Value of the property = |
Price investors want to pay. Rental income ÷yield |
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Development market |
Market where new properties are developed |
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Profitability of new properties depends on |
Property value determined by investors (based on rent levels). Macro economic forecasts |
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Do |
New developments |
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Va |
Property value |
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CC |
Cost of new developments |
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Gross yield |
the income on an investment prior to expenses being deducted |
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Investment philosophy |
Investment philosophy is a clear view on market mechanics, on market efficiency and inefficiency, on what forces are at work and how they interact |
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How to make a forecast when something is 'random'? |
You can make a probability distribution |
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Groupthink= |
Illusion of invincibility: the idea that the group is sole owner of the truth. Leads to excessive self confidence and extreme decisions |
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Collective rationalisation |
The group is deaf and blind to any counter argument and refuses to review its position |
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4 conditions for crowds to be wise |
Diversity of opinion. Access to local information. Independent decision making. Information aggregation mechanism. People in the crown need to have some knowledge about the subject/problem and need to be reasonably smart |
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Conditions for crowds not to be wise |
People in the crowd do not need to be rational, very smart or experts for crowds to be wise |
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Complex adaptive systems |
A complex adaptive system is a system in which a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system's behavior |
