Question

Annual earnings, including bonuses, for Financial Analysts and Personal Financial Advisors, are currently following a skewed to the right distribution with a mean of $66,500 and a standard deviation of $10,500. According to the 68-95-99.7 rule, it is correct to say that (select ALL that apply):______.

a. the middle 95% of all Financial Analysts and Personal Financial Advisors make between $45.500 and $77,000 annually.
b. only 2.5% of all Financial Analysts and Personal Financial Advisors make less than $45,500 annually.
c. both of the above statements are false

Answer 1

c. both of the above statements are false

Explanation:

The Empirical Rule states that, for a normally distributed random variable:

Approximately 68% of the measures are within 1 standard deviation of the mean.

Approximately 95% of the measures are within 2 standard deviations of the mean.

Approximately 99.7% of the measures are within 3 standard deviations of the mean.

Distribution skewed to the right

This means that the Empirical Rule is not applicable, and the two statements are false, and thus, the correct answer is given by option c.

The first would be false nonetheless, but the second would be true if the distribution was normal.