- CFA Exams
- 2021 CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 7. Chebyshev's Inequality

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**CFA Practice Question**

What is the difference between Chebyshev's Inequality and the Empirical Rule?

B. Chebyshev's Inequality applies to any probability distribution; the Empirical Rule applies only to distributions in which 68%/95%/99% of the data points fall within one/two/three standard deviations of the mean.

C. Chebyshev's Inequality applies to any mound-shaped probability distribution; the Empirical Rule applies only to distributions in which 95% of the data points fall within two standard deviation of the mean.

A. Chebyshev's Inequality applies only to distributions in which 68% of the data points fall within one standard deviation of the mean; the Empirical Rule applies only to mound or symmetrical distributions.

B. Chebyshev's Inequality applies to any probability distribution; the Empirical Rule applies only to distributions in which 68%/95%/99% of the data points fall within one/two/three standard deviations of the mean.

C. Chebyshev's Inequality applies to any mound-shaped probability distribution; the Empirical Rule applies only to distributions in which 95% of the data points fall within two standard deviation of the mean.

Correct Answer: B

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**User Contributed Comments**
3

User |
Comment |
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olagbami |
Empircal rule applies to normal distribution where 68% of data point fall within 1 std dev, 95% of data ponts fall within 2 std dev, and 99% of data points fall within 3 std dev. |

johntan1979 |
Keyword is ANY probability distribution, regardless of the shape. |

khalifa92 |
Chebyshev's inequality holds for samples and populations and for discrete and continuous data regardless of the shape of the distribution. |