Submitted by: Ragasa, Maria Ericka R.

Subject: Behavioural Statistics

1. What is: Kurtosis and Skewness?

Skewness is a measure of symmetry, or more precisely, the lack of symmetry.
A distribution, or data set, is symmetric if it looks the same to the left and
right of the center point.
Kurtosis is a measure of whether the data are peaked or flat relative to a
normal distribution. That is, data sets with high kurtosis tend to have a
distinct peak near the mean, decline rather rapidly, and have heavy tails.
Data sets with low kurtosis tend to have a flat top near the mean rather than
a sharp peak. A uniform distribution would be the extreme case.
2. What is the interpretation for a normal curve that is positively or negatively
skewed??

A positively skewed distribution means that it has a long tail in the

positive direction (a long right tail). It is sometimes called "skewed to the
right". It is characterized by many small losses and a few extreme gains.
For the positively skewed distribution, the mode is less than the median,
which is less than the mean.
An example of a positively skewed distribution is that of housing prices.
Suppose that you live in a neighborhood with 100 homes. Ninety-nine of
those homes sell for $100,000 and there is one house that sells for
$1,000,000. The median and the mode will be $100,000, but the mean will be
$109,000. Hence, you can see that the mean has been "pulled" upward by
the existence of one home in the neighborhood.
A negatively skewed distribution has a long tail in the negative direction
(long left tail). It is sometimes called skewed to the left." It is characterized by
many small gains and a few extreme losses.
For the negatively skewed distribution, the mean is less than the median,
which is less than the mode. In this case, there are large, negative outliers
which tend to "pull" the mean downward.
One example is the distribution of income. Most people make under $40,000
a year, but some make quite a bit more with a small number making many
millions of dollars per year. The positive tail therefore extends out quite a
long way whereas the negative tail stops at zero.

Submitted by: Ragasa, Maria Ericka R.

Subject: Behavioural Statistics

3. How do you construct a normal curve?

a.

mean = median = mode

b.

symmetry about the center

c.

50% of values less than the mean

and 50% greater than the mean

Sources:
http://www.itl.nist.gov/div898/handbook/eda/section3/eda35b.htm
http://analystnotes.com/cfa-notes-explain-skewness-and-the-meaning-of-apositively-or-negatively-skewed-return-distribution.html
http://www.mathsisfun.com/data/standard-normal-distribution.html