CFA Practice Question

CFA Practice Question

Which is true of all skewed distributions?

I. They are not symmetrical.
II. Their mean and median are not equal.
III. They are characterized by many small values and a few big values.
A. II and III.
B. I, II and III.
C. I and II.
Explanation: A skewed distribution is not symmetrical and its mean and median are not equal. While a positively skewed distribution is characterized by many small values and a few big values, the opposite is true of negatively skewed distributions. So III is false as far as "all skewed distributions" are concerned.

User Contributed Comments 5

User Comment
Kunga I wish there was some clarification about "small" and "big" values. Statement III can be thought of differently depending on if the question means absolute or relative values.
Sheeb Yeah, I got hung up on the "big" & "small" values too. I was thinking isn't that WHY it's skewed but I see what they mean.
farhan92 i just though by big they meant outliers (largely negative or largely positive)!
GBolt93 very misleading. I would consider a highly negative number large not small. E.g. stock market is negatively skewed because of large losses.
nickcoulby Impossible to know the interpretation on this
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