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There are 10 houses in the neighborhood, each equally likely to foreclose. One of these houses is adjacent to Sanchez' house.  A recent study has shown that if an adjacent house forecloses, the value of a house drops by $10,000. If it is predicted that one house will foreclose each week, what is the probability that the value of Sanchez' house will drop by $10,000 this week?  
  • a)
    1/10000
  • b)
    1/1000
  • c)
    7/1000
  • d)
    1/10
  • e)
    7/10
Correct answer is option 'D'. Can you explain this answer?
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There are 10 houses in the neighborhood, each equally likely to forecl...
Step I: Define the Event 
Here, we have to find the probability of the event that the value of Sanchez’s house drops by $10,000. This drop in value will come if a house adjacent to Sanchez forecloses.
Thus, the event in this case is: the house adjacent to Sanchez forecloses
Step II: Find n, the number of ways in which all outcomes can occur
The number of ways in which any one of the 10 houses can foreclose, n = 10.  
Step III: Find x, the number of ways in which the event can occur
The event happens if the house adjacent to Sanchez’s forecloses. This can happen only in one way since there is only one house adjacent to Sancehz’ house.
Thus, x = 1
Step IV: Probability = x/n 
        P (Event) = 1/10 = 0.1    
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Most Upvoted Answer
There are 10 houses in the neighborhood, each equally likely to forecl...
Probability Calculation:
First, let's calculate the probability that the adjacent house will foreclose. Since there are 10 houses in the neighborhood and each house is equally likely to foreclose, the probability of any one house foreclosing is 1/10.

Probability of Adjacent House Foreclosing:
- Since one of the 10 houses is adjacent to Sanchez house, the probability that the adjacent house will foreclose is 1/10.

Probability of Value Drop:
- If the adjacent house forecloses, the value of Sanchez house will drop by $10,000. Therefore, the probability that the value of Sanchez house will drop by $10,000 this week is equal to the probability that the adjacent house will foreclose, which is 1/10 or 0.1.
Therefore, the probability that the value of Sanchez house will drop by $10,000 this week is 1/10 or 0.1.
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There are 10 houses in the neighborhood, each equally likely to foreclose. One of these houses is adjacent to Sanchez' house. A recent study has shown that if an adjacent house forecloses, the value of a house drops by $10,000. If it is predicted that one house will foreclose each week, what is the probability that the value of Sanchez' house will drop by $10,000 this week?a)1/10000b)1/1000c)7/1000d)1/10e)7/10Correct answer is option 'D'. Can you explain this answer?
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There are 10 houses in the neighborhood, each equally likely to foreclose. One of these houses is adjacent to Sanchez' house. A recent study has shown that if an adjacent house forecloses, the value of a house drops by $10,000. If it is predicted that one house will foreclose each week, what is the probability that the value of Sanchez' house will drop by $10,000 this week?a)1/10000b)1/1000c)7/1000d)1/10e)7/10Correct answer is option 'D'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about There are 10 houses in the neighborhood, each equally likely to foreclose. One of these houses is adjacent to Sanchez' house. A recent study has shown that if an adjacent house forecloses, the value of a house drops by $10,000. If it is predicted that one house will foreclose each week, what is the probability that the value of Sanchez' house will drop by $10,000 this week?a)1/10000b)1/1000c)7/1000d)1/10e)7/10Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for There are 10 houses in the neighborhood, each equally likely to foreclose. One of these houses is adjacent to Sanchez' house. A recent study has shown that if an adjacent house forecloses, the value of a house drops by $10,000. If it is predicted that one house will foreclose each week, what is the probability that the value of Sanchez' house will drop by $10,000 this week?a)1/10000b)1/1000c)7/1000d)1/10e)7/10Correct answer is option 'D'. Can you explain this answer?.
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