Which of the Following Is True of the Coefficient of Skewness

question 56

Multiple Choice

Which of the following is true of the coefficient of skewness (CS) ?

• A) If the CS is positive, the distribution of values tails off to the left.
• B) If the CS value is between 0.5 and 1, the skewness is considered to be moderate.
• C) If the CS is closer to zero, the degree of skewness is considered to be high.
• D) If the CS value is between -0.5 and -1, the skewness is considered negligible.

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Definitions:

Real Rate Of Return

The annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation.

Annually Compounded

Interest on an investment or loan calculated once per year, including interest on the initial amount and all previously accumulated interest.

Effective Rate

The actual interest rate of an investment or loan when compounding interest is taken into account, differing from the nominal rate by including the effects of compounding.

Financial Position

A snapshot of the resources, obligations, and the net worth of an individual or organization at a specific point in time.