Five assessment-to-sale ratios are 0.90, 0.95, 1.00, 1.05 and 1.10. The median ratio is 1.00. What is the coefficient of dispersion?
Correct Answer
A) 6.0
Why this is correct: The coefficient of dispersion (COD) measures assessment uniformity. Calculate: 1) Find absolute deviations from median (1.00): |0.90-1.00|=0.10, |0.95-1.00|=0.05, |1.00-1.00|=0, |1.05-1.00|=0.05, |1.10-1.00|=0.10. Sum=0.30. 2) Average deviation = 0.30/5 = 0.06. 3) COD = (0.06/1.00) × 100 = 6.0. Why the other choices are wrong: "10.0" is wrong; it might come from misapplying the calculation. "20.0" is wrong; it might result from using the range or incorrect averaging. "30.0" is wrong; it might be the sum of deviations (0.30) misinterpreted. Exam tip: COD = (Average absolute deviation / Median) × 100. Lower COD means more uniform assessments.
Why This Is the Correct Answer
Why this is correct: The coefficient of dispersion (COD) measures assessment uniformity. Calculate: 1) Find absolute deviations from median (1.00): |0.90-1.00|=0.10, |0.95-1.00|=0.05, |1.00-1.00|=0, |1.05-1.00|=0.05, |1.10-1.00|=0.10. Sum=0.30. 2) Average deviation = 0.30/5 = 0.06. 3) COD = (0.06/1.00) × 100 = 6.0. Why the other choices are wrong: "10.0" is wrong; it might come from misapplying the calculation. "20.0" is wrong; it might result from using the range or incorrect averaging. "30.0" is wrong; it might be the sum of deviations (0.30) misinterpreted. Exam tip: COD = (Average absolute deviation / Median) × 100. Lower COD means more uniform assessments.
More Statistics Questions
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?
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?
In a market study, what does a frequency distribution of sale prices show?
An appraiser includes months elapsed since each sale as a variable in a price model. What is this intended to capture?
An appraiser presents a statistical analysis in a report. What must accompany it for the reader to weigh it?
An R-squared of 0.86 in a sales model indicates that:
Which measure would best summarize the most common lot size in a subdivision?
Paired sales analysis and regression differ mainly in that regression:
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam