An appraiser reports a mean sale price of $327,483.62. What is the difficulty with this?
Correct Answer
B) The figure implies unwarranted precision
Why this is correct: Reporting a mean sale price to the cent ($327,483.62) implies a level of precision that is not justified by the underlying market data, which is inherently imprecise and often rounded. This is a violation of the principle that communicated precision should not exceed the precision of the evidence. Why the other choices are wrong: The mean can be a useful measure to report. There is no rule prohibiting cents in reports. While the median is often more appropriate for skewed data, it is not required to be reported alongside the mean. Exam tip: Avoid spurious precision. Round your statistics to reflect the reliability of your data (e.g., to the nearest hundred or thousand dollars).
Why This Is the Correct Answer
Why this is correct: Reporting a mean sale price to the cent ($327,483.62) implies a level of precision that is not justified by the underlying market data, which is inherently imprecise and often rounded. This is a violation of the principle that communicated precision should not exceed the precision of the evidence. Why the other choices are wrong: The mean can be a useful measure to report. There is no rule prohibiting cents in reports. While the median is often more appropriate for skewed data, it is not required to be reported alongside the mean. Exam tip: Avoid spurious precision. Round your statistics to reflect the reliability of your data (e.g., to the nearest hundred or thousand dollars).
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