If the distribution of returns is non-normal and positively skewed,the investor has a greater probability of earning __________ returns rather than __________ returns.

A) extreme positive; extreme negative
B) extreme negative; extreme positive
C) none of theses choices

Question

If the distribution of returns is non-normal and positively skewed,the investor has a greater probability of earning __________ returns rather than __________ returns.

A) extreme positive; extreme negative
B) extreme negative; extreme positive
C) none of theses choices

Quizplus · Accepted Answer

As investors prefer positive returns to negative returns,a positively skewed return distribution would be favoured over a symmetric distribution or a negatively skewed distribution.Where the distribution is positively skewed,the investor has a greater probability of earning extreme positive returns than of earning extreme negative returns.

If the Distribution of Returns Is Non-Normal and Positively Skewed,the