A Madness for all Seasons

Our fourth post on the  2017 VCE exam madness will be similar to our previous post: a quick whack of a straight-out error. This error was flagged by a teacher friend, David. (No, not that David.)

The 11th multiple choice question on the first Further Mathematics Exam reads as follows:

Which one of the following statistics can never be negative? 

A. the maximum value in a data set

B. the value of a Pearson correlation coefficient

C. the value of a moving mean in a smoothed time series

D. the value of a seasonal index

E. the value of a slope of a least squares line fitted to a scatterplot

Before we get started, a quick word on the question’s repeated use of the redundant “the value of”.

Bleah!

Now, on with answering the question.

It is pretty obvious that the statistics in A, B, C and E can all be negative, so presumably the intended answer is D. However, D is also wrong: a seasonal index can also be negative. Unfortunately the explanation of “seasonal index” in the standard textbook is lost in a jungle of non-explanation, so to illustrate we’ll work through a very simple example.

Suppose a company’s profits and losses over the four quarters of a year are as follows:

   

So, the total profit over the year is $8,000, and then the average quarterly profit is $2000. The seasonal index (SI) for each quarter is then that quarter’s profit (or loss) divided by the average quarterly profit:

   

Clearly this example is general, in the sense that in any scenario where the seasonal data are both positive and negative, some of the seasonal indices will be negative. So, the exam question is not merely technically wrong, with a contrived example raising issues: the question is wrong wrong.

Now, to be fair, this time the VCAA has a defense. It appears to be more common to apply seasonal indices in contexts where all the data are one sign, or to use absolute values to then consider magnitudes of deviations. It also appears that most or all examples Further students would have studied included only positive data.

So, yes, the VCAA (and the Australian Curriculum) don’t bother to clarify the definition or permitted contexts for seasonal indices. And yes, the definition in the standard textbook implicitly permits negative seasonal indices. And yes, by this definition the exam question is plain wrong. But, hopefully most students weren’t paying sufficient attention to realise that the VCAA weren’t paying sufficient attention, and so all is ok.

Well, the defense is something like that. The VCAA can work on the wording.