The renewal probability is assumed to be 60% for a particular lease with 12 months vacant if the lease is not renewed. The expected vacancy at the end of the lease is:
A) 4.8 months
B) 7.2 months
C) 9.0 months
D) 12.0 months

Question

Quizplus · Accepted Answer

The expected vacancy is calculated as the probability of non-renewal (40%) multiplied by the 12 months of vacancy, which equals 4.8 months.

The Renewal Probability Is Assumed to Be 60% for a Particular