CFA Level I · CFA Level I Exam · Statistical Characteristics of Asset Returns
For a return distribution with positive skewness, the relationship among the mean, median, and mode is best described as:
For a positively skewed distribution, the mean is greater than the median, which is greater than the mode. The long right tail drags the mean furthest toward large positive values, while the mode remains at the peak. The reverse order applies to negative skew.
- Amean > median > modeCorrect
- Bmode > median > mean
- Cmean = median = mode
Explanation
With a long right tail, large positive values pull the mean up the most, the median less so, and the mode stays at the peak. This gives mean > median > mode. The reverse ordering applies to negative skew, and equality applies to symmetric distributions.
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