A) Over the period in question two factors contributed to a decrease i
A) Over the period in question two factors contributed to a decrease in the effective cost of capital, and thus in capitalization rates.
B) Various explanations have been given for the significant decrease in housing capitalization rates.
C) Second, there was a widespread movement towards reductions in state and local property tax rates beginning with the passage of Proposition 13 in California.
D) First, the interaction of high inflation rates and the tax system, through the deduction of interest payments, dramatically reduced after-tax real interest rates despite increases in nominal mortgage rates.
Right Answer is: D
The first sentence should be sentence B as it introduces the theme of the passage i.e. ‘decrease in housing capitalization rates’. Sentence A further tells that there are two reasons for the same, thereby, becoming the second sentence. Sentences D and C are the third and fourth sentences respectively since they explain the two reasons as stated in the sentence A.
Hence, the correct answer is option D i.e. BADC.