- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 10. Kurtosis in Return Distributions

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**CFA Practice Question**

Which is true of a leptokurtic distribution?

II. It will have thinner tails than a normal distribution.

III. It will be less peaked than a normal distribution.

IV. It will have fatter tails than a normal distribution.

I. It will be more peaked than a normal distribution.

II. It will have thinner tails than a normal distribution.

III. It will be less peaked than a normal distribution.

IV. It will have fatter tails than a normal distribution.

A. I and II

B. I and IV

C. III and IV

**Explanation:**I and IV are true of leptokurtic distributions. This is also called having "excess kurtosis." II and III are characteristic of platykurtic distributions.

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**User Contributed Comments**
5

User |
Comment |
---|---|

sabcfa1 |
more peaked and fatter tails ... leptokurtic dist has greater percentage of extreme outcomes than normal dist (see Vol 1, page 300 & figure 7-8) |

poomie83 |
this is how I remember it lepto is fatter lepto sound like lypo which is what the fatties get done |

maria15 |
Poomie83 - lol. But helpful :) |

toscarlett |
poomie83 - really thanks!^) |

CJPerugini |
I don't like the term "thin" and "fat" for the tails. It implies thickness not width. |