Groundlearn / Glossary / Skewness
Skewness
A CFA and FRM term, defined in plain English with the distinction examiners test.
What it means
The asymmetry of a distribution. Positive skew has a long right tail; negative skew has a long left tail.
The exam angle
Returns on short-volatility and credit strategies are negatively skewed: many small gains, occasional large losses. Mean and standard deviation alone hide that.
Where it appears in the syllabus
- Quantitative MethodsCFA Level I · exam weight 11–14% · Returns and benchmarks, time value, distributions, portfolio maths, regression.
- Quantitative AnalysisFRM Part I · exam weight 20% · Probability, hypothesis testing, regression, time series, volatility, simulation.
Related terms
- Arithmetic meanThe sum of the observations divided by their number.
- BootstrapResampling the observed data with replacement to estimate the sampling distribution of a statistic, without assuming a…
- Central limit theoremFor a large enough sample, the distribution of the sample mean approaches normal regardless of the shape of the…
- Coefficient of determinationThe fraction of the dependent variable’s variation explained by the regression.
- Confidence intervalA range that will contain the true parameter in a stated proportion of repeated samples.
- Continuous compoundingCompounding over infinitely small intervals.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
Practise it in Cornerstone
Snapshot cards and five-question sessions for CFA® and FRM® candidates, free on Android and offline. The full glossary is in the app too, with search.
About CornerstoneOr get a free practice question every day on the Cornerstone WhatsApp channel.