CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

If a distribution is right skewed, which of the following is (are) true?

I. It cannot be normally distributed.
II. Its skewness is negative.
III. It has a positive mean.
IV. Large positive deviations dominate large negative deviations.
Correct Answer: I and IV

A normal distribution is symmetrical and hence, has zero skewness (i.e., it is neither positively nor negatively skewed).

If the distribution is right skewed, its skewness is positive but it does not necessarily have a positive mean.

User Contributed Comments 3

User Comment
Yooo Dominate?
danlan Suppose the mode is 100, max is 200 and min is 50. Large positive deviation is 100, which dominates large negative deviation 50
bobert Or in simpler terms, suppose the mean is 50, if you have 2 outliers on each side, the ones on the right, say 600 and 450 are DOMINATING the negative ones, say 90 and 130.

Basically there is a stronger pull to the right by the large deviations.
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