IAAO COURSE 300 EXAM STUDY GUIDE
QUESTIONS WITH 100% CORRECT
ANSWERS
Weighted Mean - Answer-The weighted mean is used in ratio studies. It divides the sum
of the appraised values by the sum of the sale prices.
The ratios of the more expensive properties tend to dominate or sway this measure
Standard Deviation - Answer-The most common measure of dispersion.
Steps:
1. Find the mean
2. Subtract the mean from each observation
3. Square the deviations from the mean
4. Sum the deviations squared
5. Divide by n-1. (Variance)
6. Take square root of variance
+- 1 SD from mean = 68% of the population
+- 2 SD from mean = 95% of the population
+- 3 SD from mean = 99% of the population
Coefficient of Variation (COV) - Answer-Expresses the standard deviation as a
percentage of the mean
Divide the standard deviation by the mean x 100
A coefficient of dispersion is approximately 75% of a coefficient of variation. So if an
acceptable COD is 15, an acceptable COV would be approximately 20
+- 1 COV of the mean represents 68% of the population
+- 2 COV of the mean represents 95% of the population
+- 3 COV of the mean represents 99% of the population
Coefficient of Dispersion - Answer-Indicates how far, on average, observations are from
the median point.
, Steps:
1. Array the data
2. Find the median
3. Find the absolute difference
between the median and
each observation
4. Sum the absolute deviations
5. Divide the sum of the
absolute deviations by n
equals the average absolute
deviation (AAD)
6. Divide the AAD by the
median x 100
The acceptable COV for smaller heterogeneous areas is 15
It is approximately 75% of a COV
Price Related Differential - Answer-A measure of vertical equity that measures
uniformity between high and low priced properties.
Found be dividing the mean by the weighted mean.
Results from this equation indicates uniformity or the lack thereof.
1. If the solution is between is between o.98 and 1.03 it is considered to be acceptable.
2. If the solution is less than 0.98 it is considered to be progressive and has a positive
slope.
3. If the solution is greater than 1.03 it is considered to be regressive and has a
negative slope.
Discrete Data - Answer-Three or more predefined choices. Construction grade: poor;
fair; average; good; excellent
Binary Data - Answer-Two predefined choices. Yes or no. 0 or 1
Qualitative Data - Answer-Two or more predefined choices.
Quantitative Data - Answer-Takes on any unit measure or count. Such as, square
footage, price, number of rooms, or age.
Continuous Data - Answer-Synonymous with quantitative data.
QUESTIONS WITH 100% CORRECT
ANSWERS
Weighted Mean - Answer-The weighted mean is used in ratio studies. It divides the sum
of the appraised values by the sum of the sale prices.
The ratios of the more expensive properties tend to dominate or sway this measure
Standard Deviation - Answer-The most common measure of dispersion.
Steps:
1. Find the mean
2. Subtract the mean from each observation
3. Square the deviations from the mean
4. Sum the deviations squared
5. Divide by n-1. (Variance)
6. Take square root of variance
+- 1 SD from mean = 68% of the population
+- 2 SD from mean = 95% of the population
+- 3 SD from mean = 99% of the population
Coefficient of Variation (COV) - Answer-Expresses the standard deviation as a
percentage of the mean
Divide the standard deviation by the mean x 100
A coefficient of dispersion is approximately 75% of a coefficient of variation. So if an
acceptable COD is 15, an acceptable COV would be approximately 20
+- 1 COV of the mean represents 68% of the population
+- 2 COV of the mean represents 95% of the population
+- 3 COV of the mean represents 99% of the population
Coefficient of Dispersion - Answer-Indicates how far, on average, observations are from
the median point.
, Steps:
1. Array the data
2. Find the median
3. Find the absolute difference
between the median and
each observation
4. Sum the absolute deviations
5. Divide the sum of the
absolute deviations by n
equals the average absolute
deviation (AAD)
6. Divide the AAD by the
median x 100
The acceptable COV for smaller heterogeneous areas is 15
It is approximately 75% of a COV
Price Related Differential - Answer-A measure of vertical equity that measures
uniformity between high and low priced properties.
Found be dividing the mean by the weighted mean.
Results from this equation indicates uniformity or the lack thereof.
1. If the solution is between is between o.98 and 1.03 it is considered to be acceptable.
2. If the solution is less than 0.98 it is considered to be progressive and has a positive
slope.
3. If the solution is greater than 1.03 it is considered to be regressive and has a
negative slope.
Discrete Data - Answer-Three or more predefined choices. Construction grade: poor;
fair; average; good; excellent
Binary Data - Answer-Two predefined choices. Yes or no. 0 or 1
Qualitative Data - Answer-Two or more predefined choices.
Quantitative Data - Answer-Takes on any unit measure or count. Such as, square
footage, price, number of rooms, or age.
Continuous Data - Answer-Synonymous with quantitative data.
