Exhibit 4-4

question 31

Short Answer

Exhibit 4-4.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 2012.
• 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.
Refer to Exhibit 4-4.What is the probability that foreclosures will increase in the Inland Empire?

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Definitions:

Short-term

Relating to or occurring on a brief or immediate timescale, typically within one year, used especially in finance and investment contexts.