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.

Question

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.

Quizplus · Accepted Answer

The two points may or may not be outliers, and their influence on the analysis should be assessed before deciding whether to exclude them from the dataset. It is important to verify that the data is accurate and not the result of faulty data entry or other issues before making any decisions about how to analyze it.

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