Question

The distribution of 27 salaries at a small company has mean $35,000 and standard deviation $2,000. Suppose the company hires a 28th

28th employee at a salary of $120,000. Which of the following claims about the new salary distribution is supported?
The median is not likely to change. I
The range is not likely to change. II
The mean is likely to increase. III
A) I only
B) III only
C) I and II only
D) I and III only
E) I, II, and III

Answer 1

Option B is right

Explanation:

given that the distribution of 27 salaries at a small company has mean $35,000 and standard deviation $2,000.

When an extreme outlier such as 120000 is included for 28th employee we find that mean would jump up.

Since original median was 14th item, now with one more, new median would be average of 14th and 15th. Hence median may change.

Range will definitely change because maximum shifted up to 120000

Hence we can say

mean increases , median change and range changes.

Hence we find that Option B is right.