If the amount that the consultant is paid is reduced by a penalty which is 20 times the square of the size of the error, the prediction which maximizes his payment is
A) the mean.
B) the median.
C) the mode.
D) none of these

Question

Quizplus · Accepted Answer

The prediction that minimizes the expected penalty for an error proportional to the square of the size of the error is the mean. This is because the mean minimizes the sum of squared deviations from itself, which aligns with the penalty structure described.

If the Amount That the Consultant Is Paid Is Reduced