Kurtosis Calculation - Can Be Quicker? - CFA Level 1

This topic has 9 replies, 6 voices, and was last updated Jun-17 by Zee Tan.

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- lulu123
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  10 Apr 2017 at 9:58 pm
  
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  When we find excess kurtosis, we need the exponent 4 of the deviations from the mean.
  But we also need the standard deviation s (wich uses exponent 2 of the deviations from the mean).
  Is there a quick way of going from Sum(Deviations)^4 –> the squared version (which can then be used in the stdev) ??
  
  Like on page 386 of CFAI book 1, they do the ^4 long business, and then they just say what s is, so I’m wondering if there was a shortcut, because I seem to only be able to get s by restarting the whole squaring process… :S
- lulu123
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  10 Apr 2017 at 9:59 pm
  
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  PS: is it even realistic that we will be asked to find the kurtosis? it takes forever just to punch in the numbers. I feel like they are more likely to ask interpretation questions… thoughts?
- Snippy
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  10 Apr 2017 at 10:13 pm
  
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  Hmm. I’m not sure if they’ll ask us to calculate kurtosis. Usually, from the questions I’ve done, calculation hasn’t been asked but they focus more on asking you to analyse a kurtosis related question or maybe just a basic concept question.
- Zee Tan
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  10 Apr 2017 at 10:24 pm
  
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  I agree – probably more interpretation than calculation. From Reading 7L Level I:
  
  “explain measures of sample skewness and kurtosis”
  
  So I doubt they’ll have calculation questions.
- lulu123
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  10 Apr 2017 at 10:29 pm
  
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  so there ISN’T a way to go from the sum^4 to sum^2?
- Snippy
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  10 Apr 2017 at 10:33 pm
  
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  @lulu123 I don’t think so. I tried looking but there doesn’t seem to be a way to do that.
- padniaki
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  10 Apr 2017 at 10:35 pm
  
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  Unless they updated this LOS from last year, you shouldn’t need to know how to calculate kurtosis. Just know what excess is, how to interpret, etc.
- singhanand98
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  11 Apr 2017 at 9:48 am
  
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  @lulu123 they won’t ask to calculate kurtosis. I’ve seen Kaplan videos and they totally ignore that. The are only at “more than 3” and “less than 3”. There can be interpretation question though…
  And I don’t think you can go to the squared version directly…
- Nabeel
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  25 Jun 2017 at 10:28 am
  
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  Imo you just need to know the interpretation of Kurtosis, not calculate it.
  
  My CFA instructor at EduPristine told that in theory CFA L1 should be passable without the use of a calculator.
- Zee Tan
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  26 Jun 2017 at 5:31 am
  
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  Imo you just need to know the interpretation of Kurtosis, not calculate it.
  
  My CFA instructor at EduPristine told that in theory CFA L1 should be passable without the use of a calculator.
  
  I have known people who have walked into the exam without calculators, so yes, that is true. However wouldn’t recommend it! 😉
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