Covariance of Portfolio Returns Given ...
Covariance between variables can be calculated in two ways. One method is the... Read More
A unimodal distribution is a distribution that has one clear peak. The values increase first, rising to a single highest point where they then start to decrease. A unimodal distribution can either be symmetrical or nonsymmetrical.
A symmetrical distribution is one where the mean, mode, and median are all equal. In such a distribution, the intervals of gains or losses exhibit the same frequency. For instance, if we have a symmetrical distribution with a mean return of zero, then the frequency of losses between -2% and -1% will be equal to the frequency of gains between 1% and 2%.
A distribution that deviates from the symmetrical distribution is said to be nonsymmetrical, and that’s how we end up having positive skewness and negative skewness.
Unimodal Distribution – Positively Skewed
This is the tendency of a given frequency curve leaning towards the left. Conversely, the ‘tail’ extends to the right. In this distribution, candidates should note the following:
- The mean is bigger than both the median and the mean.
- The median always occurs between the mode and the mean.
- The observations below the mean are more than those above it.
A good example of a positively skewed distribution would be the age distribution in a developing country.
Unimodal Distribution – Negatively Skewed
This is a frequency curve where the long tail extends to the left. It has the following characteristics:
- The mode is usually bigger than both the median and the mean.
- The median is found between the mean and the mode.
- The observations above the mean are usually more than those below it.
A good example of a negatively skewed distribution would be the age distribution in a developed country.
Sergio Torrico
2021-07-23
Excelente para el FRM 2
Escribo esta revisión en español para los hispanohablantes, soy de Bolivia, y utilicé
AnalystPrep para dudas y consultas sobre mi preparación para el FRM nivel 2 (lo tomé una sola vez y aprobé muy bien), siempre tuve un soporte claro, directo y rápido, el material sale rápido cuando hay cambios en el temario de GARP, y los ejercicios y exámenes son muy útiles para practicar.
diana
2021-07-17
So helpful. I have been using the videos to prepare for the CFA Level II exam. The videos signpost the reading contents, explain the concepts and provide additional context for specific concepts.
The fun light-hearted analogies are also a welcome break to some very dry content.
I usually watch the videos before going into more in-depth reading and they are a good way to avoid being overwhelmed by the sheer volume of content when you look at the readings.
Kriti Dhawan
2021-07-16
A great curriculum provider. James sir explains the concept so well that rather than memorising it, you tend to intuitively understand and absorb them.
Thank you ! Grateful I saw this at the right time for my CFA prep.
nikhil kumar
2021-06-28
Very well explained and gives a great insight about topics in a very short time. Glad to have found Professor Forjan's lectures.
Marwan
2021-06-22
Great support throughout the course by the team, did not feel neglected
Benjamin anonymous
2021-05-10
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Daniel Glyn
2021-03-24
I have finished my FRM1 thanks to AnalystPrep. And now using AnalystPrep for my FRM2 preparation. Professor Forjan is brilliant. He gives such good explanations and analogies. And more than anything makes learning fun. A big thank you to Analystprep and Professor Forjan. 5 stars all the way!
michael walshe
2021-03-18
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