skewness

[acwilson]

Can anyone explain skewness in relation to "gains and losses". For example, looking at a positively skewed distribution, i don't get the frequent small losses and few extreme gains thing. HELP!!

This concept has appeared in this year's CFA exam...and is it the answer?

 

[bhaiyyu]

positive skew has a much wider observation range to the right side of mode than to the left side. Since right side means gains and left side means losses and because there are a lot of observations in the small left side but fewer observations on positive side, it explains the qn.

 

[ozzy609]

a negative skew could explain a large number of small losses/gains and a small number of losses.