Here the given answer is option A (leptokurtic), so I have doubt over it because Its answer shouldn’t be the option B (platykurtic)? As the risk adverse buyer, one should always want limited risk but in the case of leptokurtic the risk is more also the return could be, but Sir also told us we love thin tails (platykurtic) and positive skewness in video too.
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Kurtosis is a measure of the combined weight of the tails of a distribution relative to the rest of the distribution
Leptokurtic:- It is a distribution has fatter tails than a normal distribution so it has excess kurtosis greater than 0
Platykurtic:- It is a distribution that has thinner tails than a normal distribution.It has an excess kurtosis less than 0
Mesokurtic:- It is a distribution which is identical to the normal distribution.It has an excess kurtosis of 0
So answer should be option A i.e. lepokurtic because equity investors love it
But option B is not the answer because the degree of risk aversion depend upon the investor if he is extreme risk averse(pattu) then then he will go for return which is platykurtic but as most equity investor is not extremely risk averse most of them prefer leptokurtic return so option A is correct
You will study this concept more in the risk and return 1 chapter under portfolio management
Okay, thanks