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Probability Theory Applied to House Sales

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The probability that house sales will increase over the next six months is estimated at .25. It is also estimated that the probability is .74 that 30 year fixed-loan mortgage rates will increase over this period. Economists estimate that the probability is .89 that either housing sales or interest rates will increase. The probability that both house sales and interest rates will increase is estimated at:

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Solution Summary

We use some simple probability theory to analyze house sale estimates.

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Let A be the event corresponding to house sales increasing over the next six months and let B be the ...

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