A statistical summary is computed from sales spanning four years in a market that moved sharply. What is the flaw?
Correct Answer
A) The sample mixes different market conditions
Why this is correct: The flaw is that the sample mixes different market conditions. Pooling sales from a four-year period with sharp market movements combines data from different price levels, producing a statistical summary (like a mean or median) that does not accurately represent any point in time. Why the other choices are wrong: Four years of data may be a sufficient sample size in a stable market. Older sales can often be verified. Statistics can be applied to dated sales if they are first time-adjusted to a common date. Exam tip: For meaningful market statistics, ensure your sales data is from a stable time period or apply time adjustments to a common date before analysis.
Why This Is the Correct Answer
Why this is correct: The flaw is that the sample mixes different market conditions. Pooling sales from a four-year period with sharp market movements combines data from different price levels, producing a statistical summary (like a mean or median) that does not accurately represent any point in time. Why the other choices are wrong: Four years of data may be a sufficient sample size in a stable market. Older sales can often be verified. Statistics can be applied to dated sales if they are first time-adjusted to a common date. Exam tip: For meaningful market statistics, ensure your sales data is from a stable time period or apply time adjustments to a common date before analysis.
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