I agree with you that their answer seems poor, for the reasons you outline. They might be relying on "yesterday's weather". the XP principle that the best predictor of the weather for today is what the weather was like yesterday. This gives greater weight to more recent experience.

But generally, when using past velocity to predict current or future capacity for the team, we average the most recent three or four iterations. This has better predictive value than a single result, even if it is the most recent one.

Your reasoning is entirely correct. It is sad therefore that the answer sheet gives A as the correct answer. At the very least, you could have several "correct" answers for this, and good arguments for each one. Unfortunately, this is an example of a poorly designed question.

The below question came from a mock exam by The Learning Tree course on ACP and I'm struggling to understand the answer.

An Agile team that is halfway through a development project has just delivered 27 story points in its last iteration. However, in the iteration before that, it delivered 29 points, which is the highest total it has achieved throughout the project to date, on which it has averaged 26 story points. Which velocity should the team use to estimate its capacity in the forthcoming iteration?

A. 29
B. 26
C. 27
D. 28

The answer sheet states A (29), but I think it's C (27) because why would you use a velocity to estimate it's capacity that it has only achieved once? Surely, it should be the average , based on the last 3 -4 iterations or the last iteration. Can anyone explain why the answer is A?

Thanks.