Understanding Positive Skewness and Kurtosis in Stock Returns

Medium Statistical Concepts And Returns Skewness And Kurtosis

A financial analyst is examining the distribution of returns for a particular stock over a one-year period. After analyzing the data, the analyst finds that the distribution is positively skewed and has high kurtosis. Based on this information, which of the following statements is correct?

The stock's returns are predominantly clustered around the mean with few extreme values.

The stock's returns are likely to have more frequent extreme positive returns compared to extreme negative returns.

The stock's returns can be approximated by a normal distribution.

Hint

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