A repeat-sale pair spans a market peak: bought $400,000, sold $400,000 four years later. Concluding 'no market movement' from this pair alone errs because:
Correct Answer
D) The path between the endpoints — up then down — is invisible to the pair
Why this is correct: A single repeat-sale pair showing equal prices only gives the net change over the period. It cannot reveal the price path—such as a rise and subsequent fall that cancel out—that occurred between the two sales dates. Why the other choices are wrong: Repeat sales are a valid data source when analyzed properly. Equal prices do not prove the market rose; they show no net change. Renovation spending is a possible explanation, but not 'always' the case. Exam tip: Two data points define a trend only if the market moved in a straight line; they hide volatility.
Why This Is the Correct Answer
Why this is correct: A single repeat-sale pair showing equal prices only gives the net change over the period. It cannot reveal the price path—such as a rise and subsequent fall that cancel out—that occurred between the two sales dates. Why the other choices are wrong: Repeat sales are a valid data source when analyzed properly. Equal prices do not prove the market rose; they show no net change. Renovation spending is a possible explanation, but not 'always' the case. Exam tip: Two data points define a trend only if the market moved in a straight line; they hide volatility.
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