Re: Skewness & Kurtosis

[Ratan Gupta, FRM]

Hi Geetha,

Thanks for highlighting this point.
The difference in the formula for Skeweness given in book and class would be in the terms involving n.
In actual it should be n/{(n-1)(n-2)} , but for large n , this can be approximated to (1/n) which was given in the handouts.
I dont think you would get substantial difference in the answers.

Regarding Kurtosis, you have the same logic, in book actual formula is given (which has factor of n as n(n+1)/{(n-1)(n-2)(n-3)} , which can be approximated to 1/n)
Also in book formula is given for Excess Kurtosis, where as in the handout, Kurtosis formula is given, as explanined in the class , you need to subtract 3 from kurtosis to get the excess kurtosis.
I think substantial difference is coming because you are calculating kurtosis and tallying with excess kurtosis or the value of n being taken is small.

But, please remember you are not expected to learn the formula, in exam if this problem comes up, you will get the formula to be used.

Thanks,
Ratan Gupta, FRM
Learning Officer
Knowledge Varsity
www.knowledgevarsity.com

On Fri, Jan 15, 2010 at 6:57 AM, Geetha Vramani <vramani...@gmail.com> wrote:

Hi All,

I have been working on the cfa material sums. I find that the formula
for skewness & kurtosis is slightly different from the one's we
discussed in the class. I see a significant difference in the final
solution arrived using the formula's given in material & the one's in
the slides of the class. Can any one work this out and let me know, if
you too see different answers using these formula's?

Thanks,
Geetha