The interquartile range measures:
Correct Answer
B) The spread of the middle half of the observations
Why this is correct: The interquartile range (IQR) is a measure of statistical dispersion. It is calculated as the difference between the third quartile (75th percentile) and the first quartile (25th percentile). This captures the range of the central 50% of the data, which is the 'middle half of the observations.' As the original explanation states, this makes it resistant to outliers, focusing on where the bulk of the market sits. Why the other choices are wrong: 'The difference between the largest and smallest values' describes the full range, not the IQR. 'The average distance from the mean' describes the mean absolute deviation or standard deviation. 'The number of observations above the median' is a count, not a measure of spread. Exam tip: Remember IQR as the 'middle 50%' box in a box plot; it's the box's height, showing core market concentration.
Why This Is the Correct Answer
Why this is correct: The interquartile range (IQR) is a measure of statistical dispersion. It is calculated as the difference between the third quartile (75th percentile) and the first quartile (25th percentile). This captures the range of the central 50% of the data, which is the 'middle half of the observations.' As the original explanation states, this makes it resistant to outliers, focusing on where the bulk of the market sits. Why the other choices are wrong: 'The difference between the largest and smallest values' describes the full range, not the IQR. 'The average distance from the mean' describes the mean absolute deviation or standard deviation. 'The number of observations above the median' is a count, not a measure of spread. Exam tip: Remember IQR as the 'middle 50%' box in a box plot; it's the box's height, showing core market concentration.
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Previous Question
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?
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An appraiser presents a statistical analysis in a report. What must accompany it for the reader to weigh it?