A consistent market segment recorded 40 closed sales and 50 new listings during the same period. What is closed-sales/new-listings? The groups need not be one cohort, and this ratio alone does not prove net inventory change.
Correct Answer
C) 0.8 ratio
Period count ratio=40 closed sales/50 new listings=0.80. Interpret this statistic only under the stated sample and timing definitions, without an automatic causal or forecasting inference. Common errors: inverting the ratio (new listings ÷ closed sales) gives 1.3 ratio; dividing by closed sales plus new listings gives 0.4 ratio; reporting the shortfall share instead of the ratio gives 0.2 ratio.
Why This Is the Correct Answer
Option C is correct because the ratio of closed sales to new listings is 40 ÷ 50 = 0.80. The ratio is read in the order named, so closed sales are the numerator. As the question notes, this statistic describes the stated sample and does not by itself prove net inventory change or forecast the market.
Why the Other Options Are Wrong
Option A: 0.2 ratio
Option A, 0.2 ratio, comes from reporting the shortfall share instead of the ratio: (50 − 40) ÷ 50 = 0.2. The requested ratio is 40 ÷ 50 = 0.8.
Option B: 0.4 ratio
Option B, 0.4 ratio, comes from dividing by closed sales plus new listings: 40 ÷ (40 + 50) = 40 ÷ 90 = about 0.44, shown as 0.4. The correct denominator is new listings alone: 40 ÷ 50 = 0.8.
Option D: 1.3 ratio
Option D, 1.3 ratio, comes from inverting the ratio: 50 ÷ 40 = 1.25, shown as 1.3. Closed sales belong on top: 40 ÷ 50 = 0.8.
First named goes on top
In an 'A to B' or 'A/B' ratio, the first item named is the numerator.
How to use: Use this to set up any ratio question in the correct order.
Exam Tip
Write the ratio exactly as worded before dividing; inverting it is the most common trap.
Common Mistakes to Avoid
- -Inverting the ratio
- -Using the total of both counts as the denominator
- -Treating the ratio alone as proof of inventory change
Concept Deep Dive
Analysis
This question tests computing a simple ratio in the order stated. Closed sales go on top and new listings go on the bottom: 40 ÷ 50. The distractors come from inverting the ratio, using the wrong denominator, or computing a shortfall instead of a ratio.
Background Knowledge
Ratios of sales to listings help describe the balance between buyer activity and new supply in a market segment. A value below 1 means fewer closings than new listings during the period. Because sales and listings in a period need not be the same properties, the ratio is one indicator among several and should be interpreted with care.
Real-World Application
An appraiser reviewing a market segment finds 40 closings and 50 new listings in the same period. The appraiser reports a 0.80 ratio and looks at inventory counts and price trends before characterizing supply and demand.
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