True/False Statements about Mean and Outliers: CFA Level 1 Exam Prep

Mean and Outliers: CFA Level 1 Exam Prep

Prev Question Next Question

Question

Which of the following is/are true?

I. There are as many values above the mean as below it.

II. The sum of the differences between the observations in a sample and the mean of the sample equals zero.

III. The mean is greatly affected by "outliers."

IV. The mean is harder to estimate with reliability for open-ended data.

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E. F. G. H.

H

I would be correct if "mean" is replaced by "median" i.e. there are as many values above the median as below it. Note that one of the advantages of using the median instead of the mean is that the mean is greatly affected by outliers since it represents an average of all the observations while the median is not affected in this fashion.

Prev Question Next Question