Sample Excess Kurtosis

A distribution for daily returns has a greater number of observations in the lowest percentage gain intervals far below the mean than the number of observations in the intervals as far above the mean. It also has a large number of observations in the intervals just above the mean with an excess kurtosis of 3.00. Which of the following _best describes_ this distribution?

Incorrect. The description of where the observations lie indicate the distribution will be skewed.

Incorrect. The high level of excess kurtosis indicates that the distribution is not mesokurtic.

Correct. The distribution is leptokurtic meaning it is not normal because of the relatively high level of excess kurtosis. A mesokurtic or normal distribution would have an excess kurtosis of zero. This distribution has excess kurtosis of 3.00. The negative skew comes from the number of observations far from the mean in the lowest percentage gain intervals being far greater than the number of observations in the intervals as far above the mean.

Normal with no skew

It is mesokurtic with a positive skew

It is leptokurtic with a negative skew