CFA® Level 1 Exam: Mean Deviation, Range, and MAD

Mean Deviation, Range, and MAD

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Question

Which of the following is/are true?

I. The mean deviation can never be negative.

II. The range of a data set can never be negative.

III. The mean deviation is always less than the mean absolute deviation (MAD).

Answers

Explanations

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A. B. C. D. E. F.

B

Range of a dataset = maximum value - minimum value. Therefore, the range can never be negative. Also, since the mean deviation is the average of the absolute deviations from the mean, the MD can never be negative, either. Finally, Mean deviation and mean absolute deviation are one and the same thing.

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