Question

Once every three years, the Board of Governors of the Federal Reserve System collects data on household assets and liabilities through the Survey of Consumer Finances (SCF). Some results from the 2013 survey are provided. (a) Transaction accounts, which include checking, savings, and money market accounts, are the most commonly held type of financial asset. The mean value of transaction accounts per household was $270,000, and the median value was $94,500 Which statement explains the differences between the two measures of center? O A. The distribution of the value of transaction accounts is a left-skewed distribution. B. The distribution of the value of transaction accounts is an approximately symmetrical distribution O C. The distribution of the value of transaction accounts is a right-skewed distribution. D. The distribution of the value of transaction accounts is a uniform distribution.

Answer 1

C

Explanation:

The mean, median and mode are measure of central tendency of a data. The mean represent the average of the data which calculated by summing up the whole data and divide it by the frequency, the median is the number in the middle after the data had been arranged from ascending or descending order and the mode refer to the number that occurs the most in the data. When the data's histogram is plotted if the mean is less than the median, the data is left skewed and both the mean and median are less than the mode. When the mean is equal to the median and the mode; the data is perfectly symmetrical and both the mean and the median are equal to the mode.

When the mean is greater than the median and the median is less than the mode; the distribution is right skewed

Answer 2

C. The distribution of the value of transaction accounts is a right-skewed distribution.

Explanation:

Some definitions

A skewed right distribution is one in which the tail is on the right side. On simple words we have most of the values on the left part of the distribution.

And present the following property:

`Mode< Median< Mean`

A skewed left distribution is one in which the tail is on the left side. On simple words we have most of the values on the left part of the distribution.

And present the following property:

`Mean< Median< Mode`

On a symmetric distribution we satisfy
`Mean= MEdian= Mode`

For our case we have that
`Mean= 270000` and
`Median=94500`

And we can see that
`Mean> Median` then we can conclude that this distribution is skewed to the right. And the best option would be:

C. The distribution of the value of transaction accounts is a right-skewed distribution.