Rounding a statistically derived adjustment before applying it is:
Correct Answer
B) Appropriate, since the underlying data is not precise
Why this is correct: The governing concept is that adjustments must reflect the quality and precision of the market data used to derive them. A statistically derived figure like 63.47 per square foot suggests an unrealistic level of precision from typical sales data. Rounding it to a more defensible figure, such as 65, appropriately aligns the adjustment's presentation with the inherent imprecision of the underlying evidence. Why the other choices are wrong: "Prohibited by appraisal standards" is wrong because standards do not prohibit rounding; they require credible results. "Required to two decimal places" is wrong as it demands excessive, unjustified precision. "Only acceptable when applied to percentage adjustments" is wrong because rounding is acceptable for various adjustment types, not just percentages. Exam tip: If a derived number implies more precision than your market data supports, rounding is not just acceptable—it's necessary for credibility.
Why This Is the Correct Answer
Why this is correct: The governing concept is that adjustments must reflect the quality and precision of the market data used to derive them. A statistically derived figure like 63.47 per square foot suggests an unrealistic level of precision from typical sales data. Rounding it to a more defensible figure, such as 65, appropriately aligns the adjustment's presentation with the inherent imprecision of the underlying evidence. Why the other choices are wrong: "Prohibited by appraisal standards" is wrong because standards do not prohibit rounding; they require credible results. "Required to two decimal places" is wrong as it demands excessive, unjustified precision. "Only acceptable when applied to percentage adjustments" is wrong because rounding is acceptable for various adjustment types, not just percentages. Exam tip: If a derived number implies more precision than your market data supports, rounding is not just acceptable—it's necessary for credibility.
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