StatisticsMEDIUM4.5% of exam

An analysis excludes 15 of 60 sales without explanation. What is the concern?

Correct Answer

C) A quarter of the evidence was removed unaccountably

Fifteen out of 60 is 25%. Without an explained, supportable selection basis, the reader cannot assess whether the omissions remove unsuitable data or bias the result. Exclusions may be justified; the count alone does not prove bias. Client permission and one-for-one replacement are not universal statistical requirements, and 60 observations are not inherently inadequate.

Answer Options

Sixty sales are too few for any statistical work

Exclusions must be approved by the client first

A quarter of the evidence was removed unaccountably

Excluded sales must be replaced with new ones

Why This Is the Correct Answer

Option C is correct because 15 of 60 sales is a quarter of the evidence, and it was removed without any stated reason. Without an explained, supportable basis, the reader cannot tell whether the exclusions were proper or skewed the analysis. Exclusions can be justified, but they need to be explained.

Why the Other Options Are Wrong

Option A: Sixty sales are too few for any statistical work

Option A claims sixty sales are too few for any statistical work. Sixty observations are not inherently inadequate; adequacy depends on the analysis and intended use.

Option B: Exclusions must be approved by the client first

Option B says exclusions must be approved by the client first. Data selection is the appraiser's professional responsibility, and client approval is not a general statistical requirement for excluding sales.

Option D: Excluded sales must be replaced with new ones

Option D claims excluded sales must be replaced with new ones. There is no general one-for-one replacement rule; what matters is that exclusions are explained and supportable.

Explain each exclusion

Each sale left out of an analysis should come with a reason a reader can check.

How to use: Use this to judge any question about removing sales from a data set.

Exam Tip

The concern in exclusion questions is usually a missing rationale; options inventing approval or replacement rules are distractors.

Common Mistakes to Avoid

-Assuming any exclusion of sales is improper
-Believing the client must approve data exclusions
-Thinking excluded sales must be replaced one for one

Concept Deep Dive

Analysis

This question tests the transparency of data exclusions. Removing 15 of 60 sales, or 25%, without explanation leaves the reader unable to judge whether the omissions removed unsuitable data or biased the result. The issue is the missing, supportable rationale, not the act of excluding sales itself.

Background Knowledge

Analysts may properly exclude sales that are non-arm's-length, unverified or otherwise unrepresentative. Those decisions should follow stated criteria so a reader can evaluate them. Unexplained exclusions make it impossible to tell legitimate data cleaning from selection bias.

Real-World Application

A reviewer finds that a market study dropped 15 of 60 sales with no explanation. The reviewer asks the analyst to document why each was excluded, such as foreclosure sales or data errors, before relying on the conclusions.

data exclusionselection biastransparencysamplecredibility

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