Arizona Real Estate License Practice Exam

Question: 1 / 1505

What is the minimum number of participants required by law to form a real estate investment trust?

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To form a real estate investment trust (REIT), the law specifies a minimum number of participants to ensure that there is a broad base of investors in the trust. The correct answer indicates that at least 100 persons must participate in the formation of the REIT. This requirement helps promote the diversification of the investment pool, reducing the risk associated with any single investor's financial impact on the trust.

This threshold also aims to protect the interests of smaller investors by ensuring that no single investor has dominance over the trust's decision-making processes. By requiring a minimum of 100 participants, the law encourages wider investment participation, which is essential for the stability and accountability of a REIT. Overall, this figure aligns with the objective of fostering an equitable investment environment in real estate markets.

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