This Question: 1 pt 8 of 10 (0 complete) This Quiz: 10 pts possible For a sample

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This Question: 1 pt 8 of 10 (0 complete) This Quiz: 10 pts possible For a sample of 36 houses, what would you expect the distribution of the sale prices to be? A real-estate agent has been assigned 0 houses at radom to sel this month. She wants to know whether the mean price of those houses is typical. What, if anything, does she need to assume about the distribution of prices to be able to use the Central Limit Theorem? Are those assumptions reasonable? What would you expect the distribution of the sale prices to be? O A. Prices tend to increase over time, so the distribution will be skewed to the right OB. Prices cannot be less than 0, but there is nothing to prevent some from beng expensive, so they are likely to be skewed to the right C. Prices follow a Poisson distribution because price is discrete. O D. Prices tend to be about the same in any given area, so the distribution is probably uniform. What assumptions, if any, need to be made to be able to use the Central Limit Theorem? Select all that apply A. The prices must be assumed to be randomly selected. B. The distribution of prices must be assumed to be not too skewed and without outiers C. The prices must be assumed to be independent. D. No assumptions are needed Are the assumptions reasonable? Select all that apply It is not reasonable to assume that there are no outliers. B. It is not reasonable to assume te houses are randomly selected. A C. It is not reasonable to assume the prices are independent D. No assumptions are needed. Click to select your answers).

Explanation / Answer

1) Prices can definitely not be negative, also, it can be expected that the houses can be expensive than usual(due to constant hike in the prices).

Thus, Option C seems the most appropriate option.

2) For the central limit theorem, which states that the mean of the samples selected from any distribution is normally distributed. (Provided the sample size is large)

It is assumed that the samples are independent and identically distributed.

Therefore, regardless of the distribution of prices, it is important for the samples to be random and independent.

However, since here the sample size (10) is very small the distribution of prices should be approximately normal.

Thus, Options A, B and C apply.

3) It is not reasonable to assume that there are no outliers because there tend to be outliers.

Also, since housing prices tend to influence each other, it is not reasonable to assume they are independent.

Thus, Option A and C

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