Question

A person is considering investing in a property for one year. There are 4 possible outcomes being considered. Probability of the property value staying the same is 40%. The probability the property value will increase in value by 30% is 5%. The probability the property value will decrease by 20% is 10 %. The last potential outcome is that the property will increase by 10%. Construct a probability distribution table.

Answer 1

Total probability of an event is always 100%

The probability of the property value staying the same is 40%.

The probability the property value will increase in value by 30% is 5%.

The probability the property value will decrease by 20% is 10 %.

So, the probability that property value will increase by 10% = 100% - (40% + 5% + 10%) = 100% - 55% = 45%

The probability distribution table is as follows:

Event	Probability
The property value will remain the same	40%
The property value will increase by 30%	5%
The property value will decrease by 20%	10%
The property value will increase by 10%	45%