An Investor Is Keeping a Careful Eye on the Real

question 49

Short Answer

An investor is keeping a careful eye on the real estate markets in Las Vegas and the Inland Empire. The following are her predictions for the real estate market in 2016.
• With 0.32 probability, foreclosures will increase in Las Vegas.
• With 0.46 probability, foreclosures will increase in Las Vegas or the Inland Empire.
• With 0.27 probability, foreclosures will increase in Las Vegas and the Inland Empire.
What is the probability that foreclosures will increase in the Inland Empire?

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Definitions:

Straight-Line Method

A method of calculating the depreciation of an asset that evenly spreads out its cost over its useful life.

Entertainment Expenses

Costs for business-related entertainment that may be partially deductible under certain conditions.

Listed Property

Assets required to be reported for tax purposes because they have the potential for personal use, such as cars, computers, and real property.

Standard Mileage Rate

The IRS-set rate per mile that taxpayers can use to calculate deductions for business, charitable, medical, or moving purposes when using a vehicle.