The situation that demonstrates the principle of anticipation is when an investor buys above market because they know an area is rapidly increasing in value.
The principle entails the idea that suggest the present value of a property is affected by the anticipated income or utility.
As an appraiser considers this principle as he works to arrive at a value for the home, it is an important method where the appraiser uses the income approach to determine the value of a property.
Hence, in this context of question, the situation that demonstrates the principle of anticipation is when an investor buys above market because they know an area is rapidly increasing in value.
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