CAE Mass Appraisal and Statistical Analysis 2

Question 1

How is the coefficient of dispersion (COD) calculated in a ratio study?

Accepted Answer

Average absolute deviation of ratios from the median ratio, divided by the median ratio, times 100

Answer

COD measures uniformity as the average absolute deviation from the median expressed as a percentage of the median.

Question 2

Under IAAO ratio study standards, what COD range is generally acceptable for newer or fairly homogeneous single-family residential properties?

Accepted Answer

5.0 to 10.0

Answer

IAAO recommends a COD of 5.0 to 10.0 for newer or homogeneous single-family residential strata.

Question 3

What is the IAAO-recommended acceptable range for the price-related differential (PRD)?

Accepted Answer

0.98 to 1.03

Answer

IAAO standards state PRDs between 0.98 and 1.03 are generally acceptable.

Question 4

A ratio study produces a PRD of 1.08. What does this most likely indicate?

Accepted Answer

Assessment regressivity, with high-value properties underappraised relative to low-value properties

Answer

A PRD above 1.03 suggests regressivity, meaning higher-priced properties are assessed at lower ratios.

Question 5

What is the IAAO-recommended acceptable range for the overall level of appraisal (median ratio)?

Accepted Answer

0.90 to 1.10

Answer

IAAO standards call for the median ratio to fall between 0.90 and 1.10.

CAE - Certified Assessment Evaluator Practice Test