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CMA Intermediate · Financial Management and Business Data Analytics · Data Processing, Organisation, Cleaning and Validation

An analyst reviews daily closing prices of a stock listed on NSE: ₹210, ₹214, ₹212, ₹2,130, ₹215. The value ₹2,130 was traced to a keying mistake where an extra zero was typed; the true price was ₹213. Which treatment is most appropriate, and what is the mean of the corrected series?

Correct the value to ₹213 from the source record, giving a mean of ₹212.80. The ₹2,130 is a verified typing error with a known true value. The corrected total is 1,064 over five days. Deleting or keeping the error loses information or distorts the mean.

  1. ADelete the observation; mean ₹212.75
  2. BCorrect the value to ₹213 using the source record; mean ₹212.80Correct
  3. CReplace it with the median ₹214; mean ₹213.00
  4. DRetain it as a genuine outlier; mean ₹596.20

Explanation

Because the error is a verified entry mistake and the true value is known, it should be corrected from the source. Corrected series: 210+214+212+213+215 = 1,064; 1,064/5 = 212.80. Deleting gives (210+214+212+215)/4 = 212.75, which discards usable information. Retaining it gives 2,981/5 = 596.20, which is distorted.

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