Question
A business executive has just been transferred from Chicago to Atlanta and needs to sell her house in Chicago quickly. The executives employer has offered
A business executive has just been transferred from Chicago to Atlanta and needs to sell her house in Chicago quickly. The executives employer has offered to buy the house for $210,000, but the offer expires at the end of the week. The executive does not currently have a better offer but can afford to leave the house on the market for another month. From conversations with her realtor, the executive believes that the price she will get by leaving her house on the market for another month is uniformly distributed between $200,000 and $225,000.
a. Write out the mathematical expression for the pdf of the sales price if she leaves her house on the market for another month, and sketch the graph of the pdf.
b. If she leaves her house on the market for another month, what is the probability that she will get at least $215,000 for it?
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