Question 259831: According to the National Association of Home Builders, the median selling price of new homes in the United States in 2002 was $187,100. Which of the following is the most plausible value for the standard deviation: $15,000, $1000, $60,000, or $1,000,000. why?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! According to the National Association of Home Builders, the median selling price of new homes in the United States in 2002 was $187,100. Which of the following is the most plausible value for the standard deviation: $15,000, $1000, $60,000, or $1,000,000. why?
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The housing prices probably range from 120,000 to 250,000
That is a range of 130,000
6-sigma pretty well covers the range of a normal distribution.
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If 6sigma = 130,000
sigma = (1/6)(130,000) is approximately 21,000
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Ans: 15,000 looks like a plausible standard deviation.
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Cheers,
Stan H.
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