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Kurtosis calculation – can be quicker?

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  • 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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      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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      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?

    • Zee Tan
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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.

    • Zee Tan
      Keymaster
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      3

      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! 😉

    • lulu123
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      so there ISN’T a way to go from the sum^4 to sum^2?

    • Snippy
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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.

    • singhanand98
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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…

    • Snippy
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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.

    • padniaki
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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.

    • Nabeel
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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.

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