The interquartile range of a set of sale prices describes which of the following?
Correct Answer
A) The spread of the middle half of the observations
Why this is correct: As the original explanation states, the interquartile range (IQR) is the difference between the 75th percentile (Q3) and the 25th percentile (Q1). This range contains the middle 50% of the data, excluding the lowest and highest quarters. Why the other choices are wrong: The gap between the highest and lowest observation is the range, not the IQR. The average distance of each value from the mean is related to standard deviation, not IQR. The proportion of sales above the mean sale price is not measured by IQR. Exam tip: IQR focuses on the central data, making it resistant to outliers. Range is sensitive to extremes.
Why This Is the Correct Answer
Why this is correct: As the original explanation states, the interquartile range (IQR) is the difference between the 75th percentile (Q3) and the 25th percentile (Q1). This range contains the middle 50% of the data, excluding the lowest and highest quarters. Why the other choices are wrong: The gap between the highest and lowest observation is the range, not the IQR. The average distance of each value from the mean is related to standard deviation, not IQR. The proportion of sales above the mean sale price is not measured by IQR. Exam tip: IQR focuses on the central data, making it resistant to outliers. Range is sensitive to extremes.
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?
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
USPAP (Ethics & Standards)
15% of exam