CFA® Level 1 Exam: Bell-Shaped Frequency Distribution

Percentage of Observations Less Than Zero

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Question

A bell-shaped, symmetrical frequency distribution has a mean of 5 and a standard deviation of 2.5. The percentage of observations less than zero is about:

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Explanation

Note that the mean is 2 standard deviations above zero. The fraction of observations in a bell-shaped, symmetrical frequency distribution which lie outside the 2- sigma range around the mean is about 5%. Since the distribution is symmetrical about the mean, the percentage of observations less than zero is approximately equal to 5%/2 = 2.5%.