If the renewal probability for a lease is assumed to be 60% and the number of months vacant would be 12 months if the lease is not renewed,what is the expected vacancy at the end of the lease?
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%) times the number of months vacant if not renewed (12 months), which equals 0.4 * 12 = 4.8 months.

If the Renewal Probability for a Lease Is Assumed to Be