9. The renewal probability is assumed to be 60% for a particular lease with 12 m

Question

9. 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) (A)4.8 months (B)7.2 months (C)9.0 months (D)12.0 months 9. 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) (A)4.8 months (B)7.2 months (C)9.0 months (D)12.0 months 9. 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) (A)4.8 months (B)7.2 months (C)9.0 months (D)12.0 months

Explanation / Answer

Expected Vacancy = (1- renewal probability)* 12

= (1-60%) * 12 = 40% * 12 = 4.8 Months

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