32. An analyst calculated the excess kurtosis of information, we conclude that the distribution of returns is: A. normally distributed. B. thin-tailed compared to the normal distribution. C. fat-tailed compared to the normal distribution. From

32. An analyst calculated the excess kurtosis of information, we conclude that the distribution of returns is: A. normally distributed. B. thin-tailed compared to the normal distribution. C. fat-tailed compared to the normal distribution. From

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Which of the following is FALSE regarding variances? O A favorable variance, when it occurred, are…

A: The method of costing used to determine deviations is referred to as standard costing. The standard…

Q: Which of the following is not one of the main issues regarding data collection which can…

A: Data collection is one of the modt fundamental and important steps in any statistical analysis. If…

Q: Consider the following set of dependent and independent variables. Complete parts a through c below.…

A: Step 1: df = n - 1 - No. of predictors (Predictors: x1 and x2: 2 variables) df = 8 - 1 - 2 df = 5…

Q: Begin by selecting the formula to compute the current ratio. Current ratio formula =…

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: Monte Carlo methods is more advantageous with more uncertainties of data in the financial market. It…

A: Monte Carlo simulations are used to estimate the likelihood of various outcomes in a process that…

Q: What is the expected return? What is the variance? What is the standard deviation?

A: State Probability Returns Boom 0.25 0.15 Normal 0.50 0.08 Slow down 0.15 0.04…

Q: q4- What can be used to analyse the relationship between two categorical or qualitative variables?…

A: A scatter plot is a graphical representation that uses dots to represent values for two different…

Q: (i) (a) Find the value L(32) of the Lagrange polynomial at 32 and the relative error in the…

Q: the range of values that correlation coefficients can take is only -1 to 1. True or false

A: The correlation coefficient is a statistical measure of the strength of a linear relationship…

Q: Discuss the difference between a price-weighted index and a value-weighted index. Give one example…

A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for…

Q: Create a sample problem of an External Rate of Return.

A: External rate of return(ERR) It is the the rate of return on a venture where any "excess” cash is…

Q: In a regression analysis, the variable that is being predicted is the a. Intervening variable O b.…

A: The variable that is attempted to clarify or anticipate is known as the the response variable,…

Q: tement (M)? a. M is based on the sample results. b. the larger M is, the lower the…

A: Tolerable Error Rate (TER) is the maximum acceptable rate of error sample results. TER = EPER + An…

Q: The efficient frontier measures risk by using: Group of answer choices B. Correlation A. Risk-free…

A: Efficient frontier refers to the graphical representation of the set of optimal portfolios…

Q: Assume that every asset has the same expected return and variance. Furthermore, all assets have the…

A: Variance is a statistical tool used to measure the extent to which the returns are spread from the…

Q: Expected return and standard deviation. Use the following information to answer the questions: a.…

A: Expected return, variance and standard deviation of each asset is calculated in excel

Q: What are the steps in computing the cost of a prediction error when using the EOQ decision model?

A: Economic Order Quantity (EOQ): Economic order quantity is the quantity of order that is purchased…

Q: Consider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the…

A: The objective of the question is to identify the incorrect statements about the OLS and GLS…

Q: The variance and its square root, the standard deviation, are the most commonly used measures of…

A: Variance refers to the expectation of squared deviation of a random value from its arithmetic mean.…

Q: An analysis of what happens to the estimate of net present value when only one input variable is…

A: Net Present Value: It is the present worth of future cash flows and the initial cost of the project.…

Q: Which of the following statements are true? A. The lower the M-squared the better. B. The higher…

A: higher the sharpe ratio , the better the portfolio is. higher the treynor ratio, the better the…

Q: Q.How does variance analysis help in continuous improvement?

A: Variance Analysis: Variance analysis is the process of ascertaining the deviations between actual…

Q: The value of a correlation is reported to be r = 0.25. How is this interpreted?

A: Correlation: In the financial and investing sectors, correlation is a statistic that indicates the…

Q: I can use the regression beta as my estimate of beta in a valuation. True or false

A: Beta refers to the measurement of the volatility of stock related to the market as a whole. When…

Q: q12- In the distribution of a variable, if the mean is much smaller than the median, the data…

A: The mean, mode and median are the three categories which can be used to figure out if you have a…

Q: QUESTION 28 The kind of analysis that consists of rerunning the model to determine the effect on the…

A: There are various financial model used to analyze data.

Q: The standard deviation of a standard normal distribution

A: The correct answer is: (B) Is always equal to 1. Yes, it is true. The standard deviation of a…

Q: Standard deviation is a statistical measure of the dispersion of returns around the expected value…

A: The standard deviation is a statistical measure that may be used to assess the amount of dispersion…

Q: During the control function, the measurements taken of the performance must be accurate enough to…

A: In a corporation, control seems to be a major goal-oriented function of management. This is the…

Q: When we use Excel to perform a regression analysis, the independent variable data must be contiguous…

A: The question states how data should be placed while conducting a regression analysis in excel. We…

Q: Which one of the following statements regarding the coefficient of determination is NOT correct?

A: Coefficient of correlation is the measure which is used by the management of the company so that it…

Q: What is the standard deviation of a random variable q with the following probability distribution?…

A: Standard deviation is a statistical measure that indicates how much the data in a set deviates or…

Q: 17. The purpose of computing a minimum variance hedge ratio is to minimize the variance of the: (a)…

A: Minimum Variance Hedge Ratio is also known as optimal hedge ratio. The minimum variance hedge ratio…

Q: 2. Given: Asset 1. E(R): = 3 Var(R₂) = 1.5 Asset 2. E(R) = 5 w1 .9 w2 0 .1 E(Rp) 3 3.2 24 Var(Rp)…

A: Efficient frontier It is a set of portfolios that provide the highest expected return for the given…

Q: xplain the shape of the Markowitz (that is, mean-variance) efficient frontier, specifically what…

A: Markowitz (that is, mean-variance) efficient frontier-It is also known as mean - variance model and…

Q: Obtaining regression estimates for cost estimation requires establishing the existence of a logical…

A: The objective of the question is to identify the term that is not used to refer to the activities in…

Q: Exercise 14-11 Algo The following table lists the National Basketball Association's leading scorers,…

A: answers PPG (X) MPG (Y) X * Y X2 Y2 30.4 37.8 1149.12 924.16 1428.84 30.4 36.8…

Q: Consider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the…

A: The question is asking us to evaluate the properties of the Ordinary Least Squares (OLS) and…

Question

32. An analyst calculated the excess kurtosis of a stock's returns as -0.75. From this
information, we conclude that the distribution of returns is:
A. normally distributed.
B. thin-tailed compared to the normal distribution.
C. fat-tailed compared to the normal distribution.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Variance analysis would be appropriate to measure performance ina. profit centers.b. investment centers.c. cost centers.d. all of the above.
i need the answer quickly
(iv) For testing hypotheses: Ho: Bi = 0 H₁: B 0, for i = 1, 2, 3, 4. find t-statistics. Then on paper show how to use them to make conclusions (do not use p-values). If for some i (i = 1, 2, 3, 4) you do not reject Ho, remove the corresponding variables from consideration. Run regression again. State the new model. Compare the models.
1. What percent of the area under the standard normal curve is within one standard deviation of (above or below) the mean? 2. What does this tell you about scores that are more than one standard deviation away from the mean?
An unbiased estimator is one that: A B C has the most observations is on target on average. is off target on average.
You are given the following data about Asset A and Asset B. Asset A Asset B Expected returns 8.6% 7.9% Standard Deviation 3.8% 4.6% Assuming that an investor is to choose between Asset A or Asset B, explain which asset a rational investor will choose. c) With the use of a diagram, explain why an investor will always choose a point on the SML line.
Is the equation for volatility not Σ P ( x - x̄ )^2 ? And I am finding online that covariance is cov(x,y) = ∑(xi - x̄)(yi - ȳ) / N - 1 , I see the equation you have given does not divide by the samples, why is this?
Which of the following statements about Least Squares Regression is not true ? Least -squares regression is a mathematical technique to fit a cost -estimating equation to observed data . In least -squares regression , a statistical measure (R -squared ) can be used to determine how well the equation fits the data . Least -squares regression is considered superior to the high -low method because it uses more data points than just the high and low points None of the listed choices are the correct answer because all of the listed choices are true . Least -squares regression maximizes the vertical squared difference between the estimated and actual costs at each data point .
What is the difference between arithmetic and geometric mean returns?
7. According to mean-variance rule A. The expected return of X is at least equal to the expected return of Y, and the variance is less than that of Y. B. The expected return of X is at least equal to the expected return of Y, and the variance is greater than that of Y. C. The expected return of X exceeds that of Y and the variance is equal to or more than that of Y. D. The expected return of X less than that of Y and the variance is equal to or more than that of Y.
How is the standard deviation of returns calculated?
The correlation with Market index, Beta and CAPM Req. Return worked out manually.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS