- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 9. Symmetry and Skewness in Return Distributions
CFA Practice Question
There are 410 practice questions for this study session.
CFA Practice Question
A distribution has a mean of 7 and a range of -100 to +50. The distribution is ______.
A. left skewed
C. right skewed
Explanation: The range of values is larger to the left of the mean. Hence, the distribution is left-skewed.
User Contributed Comments 12
|haarlemmer||Mean is influenced by the tail.|
|chuong||Median = (-100+50)/2 = 25
Mean = 7
Median>mean ->Left skewed distribution
|melmilesxx||doesn't that equal -25 so median < mean??|
|rayrayrain||median is not (-100 + 50 )/2 = - 25 , in this case, median is greater than mean (7), and mode should be greater than median.|
|joe3||In this case, there should be more numbers between 7 to 50 than the numbers between -100 to 7, otherwise the mean will probably be a negative number.
So it is left skewed distribution which has fewer,extreme numbers on the left side and more,small numbers on the right.
|Shelton||More # in (7,50) =>
Median > 7 =>
Negative / Left skewed
|bahodir||Since the mean is 7, more numbers to in the range (7;50), so that the mode is in this range. If mode > mean, the distribution is skewed to the left.|
|motoloco||median is not (-100+50)/2 or something like this...median counts number of items no average...|
|bikegeek||mean, median, mode. Keep them in alphabetical order and when you compare them, the signs will point to the skew... mean > median > mode.. right skew
mean < median < mode... left skew
|gazelle||Thank you bikegeek
|Profache||"Skew" can be seen as the "Skinny" part of the distribution. Since the mean = 7 is closer to 50 than it is closer to -100, the "fat" part of the distribution is located more to the right side. And the skinny (skew) part of the distribution will be more to the left (negative).|
|rjdelong||If this were normally distributed it would have median, mode, and mean all =-25 the middle bin in the histogram. However, the mean in this question is to the right of it (+7), so the hump (mode) must push even further to the right of that, which tells you Mean<Med<Mode. The arrows point Left so we have a left skew.|