When a Distribution Is Positively Skewed

question 33

Multiple Choice

When a distribution is positively skewed,

• A) standard deviation overestimates risk.
• B) standard deviation correctly estimates risk.
• C) standard deviation underestimates risk.
• D) the tails are fatter than in a normal distribution.

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Definitions:

Purchase Returns

Goods returned by the buyer to the seller due to defects, excess supply, or other reasons.

Sales Discount

A reduction in the price of goods or services offered to customers, typically to prompt early payment or bulk purchases.

Contra Revenue Account

An account used to record reductions in gross revenue, such as discounts, returns, and allowances.