How does Kurtosis Of Returns affect trading risk?

High kurtosis indicates a greater likelihood of extreme price movements, requiring traders to be cautious about sudden market shifts.

What is a normal Kurtosis Of Returns value?

A kurtosis value of 3 indicates a normal distribution, while values above 3 suggest fatter tails with more extreme events.

How can traders reduce the risks associated with high Kurtosis Of Returns?

Implementing stop-loss orders, diversifying assets, and using hedging techniques can help mitigate risks from extreme return occurrences.

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What is KURTOSIS OF RETURNS?

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