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Reading 7: Statistical Concepts and Market Returns - LOS i

1In a positively skewed distribution, what is the order (from lowest value to highest) for the distribution’s mode, mean, and median values?

A)   Mode, mean, median.

B)   Mode, median, mean.

C)   Mean, median, mode.

D)   Median, mean, mode.

2If a distribution is positively skewed:

A)   the mean is greater than the median.

B)   the mode is greater than the median.

C)   the median, mean, and mode are equal.

D)   the mode is greater than the mean.

3A distribution with a mean that is less than its median is most likely:

A)   is negatively skewed.

B)   is positively skewed.

C)   has negative excess kurtosis.

D)   has positive excess kurtosis.

4In a normal distribution, the:

A)   mean is less than the mode.

B)   mean is less than the median.

C)   mean is greater than the median.

D)   median equals the mode.

答案和详解如下:

1In a positively skewed distribution, what is the order (from lowest value to highest) for the distribution’s mode, mean, and median values?

A)   Mode, mean, median.

B)   Mode, median, mean.

C)   Mean, median, mode.

D)   Median, mean, mode.

The correct answer was B)

In a positively skewed distribution, the mode is less than the median, which is less than the mean.

2If a distribution is positively skewed:

A)   the mean is greater than the median.

B)   the mode is greater than the median.

C)   the median, mean, and mode are equal.

D)   the mode is greater than the mean.

The correct answer was A)

For a positively skewed distribution, the mode is less than the median, which is less than the mean (the mean is greatest). Remember that investors are attracted to positive skewness because the mean return is greater than the median return.

3A distribution with a mean that is less than its median is most likely:

A)   is negatively skewed.

B)   is positively skewed.

C)   has negative excess kurtosis.

D)   has positive excess kurtosis.

The correct answer was A)

A distribution with a mean that is less than its median is a negatively skewed distribution. A negatively skewed distribution is characterized by many small gains and a few extreme losses. Note that kurtosis is a measure of the peakedness of a return distribution.

4In a normal distribution, the:

A)   mean is less than the mode.

B)   mean is less than the median.

C)   mean is greater than the median.

D)   median equals the mode.

The correct answer was D)

In a normal distribution, the mean, median, and mode are all equal.

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