- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Statistical Measures of Asset Returns
- Subject 1. Measures of Central Tendency
CFA Practice Question
Which measures of central tendency are not affected by extremely low or extremely high values?
A. Geometric mean and mean
B. Mode and median
C. Mean and median
Explanation: Mode and median are concepts which are based on the position of observations when ordered (median) and the number of most frequent occurrences (mode). These measures are not affected by extreme values.
User Contributed Comments 5
User | Comment |
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Lamkerst | Why median is not affected by extreme values? Low and high values define the range. The median is the middle point and therefore sensitive to extreme values, no? |
sheenalim | values 11,13,15. median = 13 values 1,13,50. median = 13 therefore median is not affected by extreme values |
migena | range and median are not the same thing. median is a measure of central tendency, whereas the range measures dispersion. |
najat | Lamkerst, the median is the middle point but you just need to take into account how many values there are, not their actual value. |
GinnyB | The median is not sensitive to outliers as it is a measure of central tendency. Outliers would only affect the median once they began to aggregate in frequency - and would no longer be outliers. |