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Savings institutions are exposed to credit risk as a result of their heavy concentration in mortgages, mortgage-backed securities, and other securities. They attempt to diversify their investments to reduce credit risk. Savings institutions are highly susceptible to interest rate risk because their asset portfolios are typically less rate sensitive than their liability portfolios are.

Please respond to all of the following prompts in the class discussion section of your online course:

Would you put real estate into your portfolio now? If so, what kind of real estate?
Of the three primary approaches to real estate valuation, which makes the most sense to you and why?

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