**Presenting 2 statements…Decode them:**

**Statement 1** – A positively skewed distribution is characterized by many small losses & a few extreme gains.

**Statement 2:** A negatively skewed distribution is characterized by many small gains & a few extreme losses.

This answer was edited.Decoding the 2 St hereunder:Explanation to St 1-This statement basically means that there are “many” with little or negative returns so they are not the outliers while there are only a “few” with extreme gains i.e. they are the outliers and therefore lie on the extreme right side of the positively skewed graph.Explanation to St 2:This statement basically means that there are “many” with average or positive returns so they are not the outliers while there are only a “few” with extreme losses i.e. they are the outliers and therefore lie on the extreme left side of the negatively skewed graph.Note: In statistics, an outlier is a data point that differs significantly from other observations & has a very small probability of its occurrence.CREDITS: Saksham BajajPositive Skewness mai risk to reward ratio acha hota hai stock mai

jane ko thoda hai ane ko bohut sara isyle positive skewness.

waha se koi bhi stock nikalta hai toh reward acha mileta hai

our

Negative Skewness mai risk to reward ratio acha nhi hota waha se

stock upper toh ja sakta hai lekin jada nhi jaha sakta our niche ane ka chance jada hota hai

isyle Negative Skewness

This answer was edited.Considering PE Ratios of comapnies being positively skewed,

it means that

Very Few companies have High PE Ratio

Most companies have PE Ratio less than mean

Sir, could you help me plz to solve the question…

Hello,

Present value of future cash flows = 8/(1.1) + 108/(1.1)^2

= 96.52

at this amount loan can be set-off today

For statement 1- Can we take example of Lottery ticket.

For Statement 2- Option Writing

Please correct me if I am wrong.

Statement 1– A positively skewed distribution is characterized by many small losses & a few extreme gains.Positively skewed or right skewed distribution means the outliers are on positive side (very few items) and most of the values are at lower side.

Ex. Payoff from Lottery Ticket, Payoff from option buying, Marks of student in difficult exam

Statement 2:A negatively skewed distribution is characterized by many small gains & a few extreme losses.Negatively skewed or left skewed distribution means the outliers are on lower side (very few items) and most of the values are at higher side.

Ex. Option Selling, Marks of Student in easy exam

Statement 1- This is because the in positive skewwed graph, the outliers lies in the right side of the graph, shifting the mean towards it. However the peak of the graph will be at the left side of the mean showing that the maximum units will lie less than the mean. According to people, anything less than the average is considered as loss and this means that their will be frequent however small losses and since there still is some units in the right side of the mean, there can be huge however rare gains.

Statement 2- This is because in the negative skewwed graph, the outliers lies in the left side of the graph, shifting the mean towards it. However the peak of the graph will be at the right side of the mean showing that the maximum units will lie more than the mean. According to people, anything more than the average is considered as gains and this means that their will be frequent however small gains and since there are still some units in the left side of the mean, there can be huge however rare losses.