Skewness, Kurtosis, and Correlation

Question 1

Positive Skew - the mode is less than than the…which is..
Negative Skew - the mean is less than the…which is…

Answer 1

the mode is less than the median, which is less than the mean.

the mean is less than the median, which is less than the mode.

Question 2

Which Skewness is more attractive to investors?

Answer 2

Positive Skew, as the mean of return is higher than the median.

Question 3

Sample Skewness for n>100 formula is:

Answer 3

SK ≈ (1/n) * Summation of all (deviations (Xi) - Xbar)^3 / S^3

Question 4

Kurtosis is the statistical measure that indicates..

Answer 4

the combined weight of the tails of the distribution relative to the rest of the distribution.

Question 5

What do greater deviations, most of the times mean?

Answer 5

Increased risk.

Question 6

A normal distribution has kurtosis of

Fat-tailed distribution has a kurtosis of above

Thin-tailed distribution of below

Answer 6

A normal distribution has kurtosis of 3.0

Fat-tailed distribution has a kurtosis of above 3

Thin-tailed distribution of below 3.0

Question 7

For a large sample size (n = 100 or more), sample excess kurtosis (Ke) is:

Answer 7

Ke ≈ ( (1/n) * Summation of all (deviations Xi - Xbar)^4 / S^4 ) - 3

Question 8

Skewness is a measure free of?

Answer 8

Scale.