CFA Practice Question

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CFA Practice Question

What percent of the observations of a normal distribution will lie above the mean plus two standard deviations?

A. 2.5%
B. 5%
C. 95%
Correct Answer: A

95% of the observations lie between plus and minus two standard deviations from the mean. Therefore, 2.5% lie above two standard deviations on each side of the mean.

User Contributed Comments 11

User Comment
Pooh This reminds me to read question carefully.
ENDER Me too:))
Rotigga Good question.
melodyliu trick question. So the answer 2.5% looks like unreasonable, but that's the right anwer
coolnan very tricky
TammTamm Me too because I just knew it was 95%. Wow, the mistakes will really hurt if you don't read the question correctly the first time.
duongth307 Hic hic, me three :))
udhay But as per Chebyshev's inequality formula the proportion of observation with in 2 standard deviation of mean is 75, then how come this answer is correct
loisliu88 the chebyshev's inequality states that AT LEAST 75% of the observations lie within 2 standard deviation, but it doesn't give a max value. And for a normal distribution like this one, 95% of the observations lie within 2 standard deviations.
yesandy11 That's why this site is so good. It trains you to look for questions like this.
msk500 If 95% of the observations lie within 2 SD away from the mean, then 5% of the observations lie away from 2 SD. As this is a normal distribution, 2.5% of the 5% of observations will lie to the right (+), and 2.5% to left (-).
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