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CMA Intermediate · Financial Management and Business Data Analytics · Introduction to Data Science for Business Decision-making

Daily closing prices (in ₹) of a stock over five days are 100, 102, 104, 106 and 188. The 188 is a genuine price after a one-time event. Which statement about the central tendency is correct?

The mean is ₹120 and the median is ₹104. The total of the five prices is ₹600, giving a mean of 120, while the middle value is 104. The extreme price of 188 pulls the mean upward but leaves the median unaffected.

  1. AMean is ₹120 and median is ₹104, so the outlier pulls the mean above the medianCorrect
  2. BMean is ₹104 and median is ₹120, so the outlier pulls the median up
  3. CMean and median are both ₹104
  4. DMean is ₹120 and median is ₹106

Explanation

Sum = 100+102+104+106+188 = 600; mean = 600/5 = 120. Sorted middle (third) value = 104, the median. The outlier raises the mean but not the median, so the median is the more robust measure here.

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