Page 60 - FINAL CFA SLIDES JUNE 2019 DAY 2
P. 60
Session Unit 2:
LOS 8.l: Explain measures of sample 8. Statistical Concepts and Market Returns (B)
skewness and kurtosis, p.154
Kurtosis -degree to which a distribution is more or less “peaked” than a normal distribution.
A leptokurtic return distribution has more
clustering around mean and larger
fluctuations represented by fatter tails; so,
more risk –why?
Greater probability of an observed value
being either close to, or far from the mean
(close to the tails).
Mesokurtic – same as normal distribution.
A platykurtic return distribution is less
clustering around mean and less fatter tails;
so, less/lower risk –why?
Greater probability of an observed value being
very close to the mean! Away from the fails!
