An appraiser presents a statistical analysis in a report. What must accompany it for the reader to weigh it?
Correct Answer
B) The data, period and market the analysis covers
Why this is correct: For a statistical analysis to be meaningful, the reader must know the underlying data (what was analyzed), the time period covered, and the specific market segment. This context allows judgment of relevance to the subject property and effective date. Why the other choices are wrong: The software package used is a technical detail, not essential for weighing the analysis. A statement that arithmetic was checked is about verification, not context. The credentials of the data supplier are less critical than the data itself. Exam tip: Always report the 'what, when, and where' of your statistical data.
Why This Is the Correct Answer
Why this is correct: For a statistical analysis to be meaningful, the reader must know the underlying data (what was analyzed), the time period covered, and the specific market segment. This context allows judgment of relevance to the subject property and effective date. Why the other choices are wrong: The software package used is a technical detail, not essential for weighing the analysis. A statement that arithmetic was checked is about verification, not context. The credentials of the data supplier are less critical than the data itself. Exam tip: Always report the 'what, when, and where' of your statistical data.
More appraisal-statistical-methods Questions
A price index rises from 100 to 121 over two years. What compound annual rate does this represent?
A sample of four sales drawn from a market with 200 annual transactions is:
A set of comparable sales has a mean of $250,000 and a standard deviation of $20,000. What is the coefficient of variation?
A property sold for $400,000 and resold three years later for $463,050 with no physical change. What compound annual rate does this indicate?
An appraiser includes both 'total room count' and 'bedroom count' as independent variables in a regression model estimating single-family home sale prices. The variance inflation factor (VIF) for 'bedroom count' is calculated as 12.3. What is the most appropriate appraisal action based on this result?
An appraiser runs a regression of sale price on GLA, age, and a binary variable for 'renovated' (1 = yes, 0 = no). The estimated coefficient for 'renovated' is $18,400 with a standard error of $6,200 and a t-statistic of 2.97. Assuming a two-tailed test at Ξ± = 0.05 and 42 degrees of freedom, what conclusion is supported regarding the market's recognition of renovations?
To validate the functional form of a regression model used for adjustments, an appraiser plots residuals against predicted values and observes a clear inverted-U pattern. What does this pattern indicate, and what is the most defensible corrective action?
A histogram of neighborhood sale prices shows two distinct peaks. What does this most likely mean?
What does it mean to validate a regression model?
An appraiser includes months elapsed since each sale as a variable in a price model. What is this intended to capture?
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