Five competitive sales closed in the past year with days on market of 60, 90, 100, 150 and 200. What is the mean (average) days on market?
Correct Answer
A) 120 days
Mean = (60 + 90 + 100 + 150 + 200) / 5 = 600 / 5 = 120 days. 100 is the median, 130 is the midpoint of the high and low, and 140 is the range. A historical mean informs, but does not by itself predict, marketing time for a particular property.
Why This Is the Correct Answer
Option A is correct because the mean is (60 + 90 + 100 + 150 + 200) / 5 = 600 / 5 = 120 days. The mean uses all the observations and divides by the number of sales.
Why the Other Options Are Wrong
Option B: 100 days
Option B is wrong because 100 days is the median, the middle value of the ordered list 60, 90, 100, 150, 200. The mean is 600 / 5 = 120 days.
Option C: 130 days
Option C is wrong because 130 days is the midrange, the midpoint of the high and low: (60 + 200) / 2 = 130. The mean uses all five values: 600 / 5 = 120 days.
Option D: 140 days
Option D is wrong because 140 days is the range, the difference between the high and low: 200 - 60 = 140. The mean is 600 / 5 = 120 days.
Add all, divide by count
The mean is the total of all values divided by how many there are; the range is high minus low and is not an average.
How to use: Use this to separate the mean from the median, midrange and range distractors.
Exam Tip
Expect distractors built from other statistics on the same data; compute the one asked for and check that it matches.
Common Mistakes to Avoid
- -Reporting the median when the mean is requested
- -Confusing the range with an average
- -Treating a historical mean as a prediction for one property
Concept Deep Dive
Analysis
This question tests computing an arithmetic mean and distinguishing it from the median, midrange and range. Add the five DOM values and divide by five.
Background Knowledge
Mean, median, midrange and range are different statistics: the first three describe the center of the data, while the range describes spread. A single long marketing period, such as 200 days, pulls the mean above the median. A historical mean informs, but does not by itself predict, the marketing time for a particular property.
Real-World Application
An appraiser summarizes marketing times for five competing sales from the past year. The mean of 120 days, compared with a median of 100 days, shows that one long marketing period is raising the average, which the appraiser considers when estimating exposure time.
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