The Following Is a Scatterplot of a Company's Profits Versus

question 15

Multiple Choice

The following is a scatterplot of a company's profits versus their sales (in dollars) . Each point on the plot represents profits and sales during one of the months in the sample. What should you do about the two points that represent profits for sales of $20K or more?

• A)The two points are clearly outliers and should be eliminated from the data set prior to analysis.
• B)The two points are clearly outliers, and the point in the far upper right should be eliminated from the data set prior to analysis because it is such an extreme outlier.
• C)The two points may or may not be outliers, but they are definitely influential points. Prior to analysis, the data should be inspected (if possible)to validate that these points are accurate and are not the result of faulty data entry or other issues.
• D)There is no need to do anything prior to analysis-all data points are equally valid and cannot simply be eliminated.

---

Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much foreign currency can be exchanged for a unit of domestic currency.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of another.

Depreciates

The reduction in the value of an asset over time, typically due to wear and tear or obsolescence.

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of another.