In a defined market period there were 80 new listings and 48 new pending contracts. Compute pending-count/new-listing-count for that period. The groups are not necessarily the same cohort, so this is not a probability that a new listing converted.
Correct Answer
C) 0.60 ratio
Period flow-count ratio=48 new pending contracts/80 new listings=0.60. This is the stated sample measure, not an automatic market-condition classification or value adjustment. Common errors: inverting the ratio (new listings ÷ pending contracts) gives 1.67 ratio; dividing by listings plus pending contracts gives 0.38 ratio; reporting the complement instead of the ratio gives 0.40 ratio.
Why This Is the Correct Answer
Option C is correct because the specified ratio is 48 new pending contracts / 80 new listings = 0.60. It is a period flow-count measure, not a probability that a given listing converted.
Why the Other Options Are Wrong
Option A: 0.38 ratio
Option A, a 0.38 ratio, comes from dividing by listings plus pending contracts: 48 / (80 + 48) = 48 / 128, about 0.38. The specified ratio uses new listings only, 48 / 80 = 0.60.
Option B: 0.40 ratio
Option B, a 0.40 ratio, reports the complement: (80 - 48) / 80 = 0.40. The question asks for pending over new listings, 48 / 80 = 0.60.
Option D: 1.67 ratio
Option D, a 1.67 ratio, inverts the ratio as new listings divided by pending contracts: 80 / 48, about 1.67. The correct ratio is 48 / 80 = 0.60.
Read the formula left to right
Pending-count over new-listing-count means pending on top, listings on the bottom. A result above 1 here would mean more pendings than listings, which these counts do not show.
How to use: Use this to catch the inverted 1.67 answer.
Exam Tip
Copy the formula from the stem and plug in values directly. Check whether a result above 1 is even possible given which count is larger.
Common Mistakes to Avoid
- -Inverting the ratio to listings over pending contracts
- -Adding the two counts in the denominator
- -Treating the ratio as the probability a listing sold
Concept Deep Dive
Analysis
This question tests computing a specified ratio of two period counts. The ratio is new pending contracts divided by new listings. The stem warns that this is not a conversion probability, so the job is simply to apply the stated formula.
Background Knowledge
Appraisers may analyze pending sales alongside listing activity to understand market momentum. A flow ratio compares counts from the same period, but because the groups are not the same cohort, it does not measure the chance that a listing sells. It is a sample indicator, not an automatic market-condition classification.
Real-World Application
An appraiser tracking a market notes 80 new listings and 48 new contracts in a quarter. She reports the ratio as one momentum indicator, while explaining it is not a sale probability and weighing it with closed sales data.
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