CFA® Level 1: CFA® Level 1 Exam Preparation

Not Always Defined

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Question

If one or more numbers in a dataset are negative, which of the following is not always defined?

Answers

Explanations

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A. B. C. D.

C

The geometric mean involves taking mathematical roots. These operations are not always defined to give real numbers when you are dealing with negative numbers.

In a dataset, different measures can be used to summarize the data and provide insights into its central tendency. However, when dealing with negative numbers in a dataset, the characteristics of these measures may vary. Let's analyze each answer choice to determine which one is not always defined when negative numbers are present.

A. Mean: The mean is calculated by summing all the values in the dataset and dividing it by the total number of values. In the presence of negative numbers, the mean can still be calculated. The negative numbers contribute to the sum in the same way as positive numbers. Therefore, the mean is always defined in a dataset, even if it contains negative numbers.

B. Median: The median is the middle value in a dataset when it is arranged in ascending or descending order. If the dataset contains negative numbers, the median can still be calculated. The negative numbers are simply included in the ordered list, and the middle value is determined. Therefore, the median is always defined in a dataset, even if it contains negative numbers.

C. Geometric mean: The geometric mean is a measure used to calculate the average of a dataset with values that are products or ratios. The geometric mean is calculated by taking the nth root of the product of all values, where n is the total number of values. When negative numbers are present in a dataset, the calculation of the geometric mean becomes problematic. The issue arises because the concept of taking the nth root of a negative number is not well-defined for all values of n. Therefore, the geometric mean is not always defined in a dataset that contains negative numbers.

D. Mode: The mode is the value(s) that occur most frequently in a dataset. In the presence of negative numbers, the mode can still be determined. The frequency count of negative numbers can be calculated, and the value(s) with the highest frequency can be identified. Therefore, the mode is always defined in a dataset, even if it contains negative numbers.

Based on the above analysis, the measure that is not always defined when negative numbers are present in a dataset is the geometric mean (answer choice C).