Question: Question 2 (10 Points): Explain why the following statements are true or false: a) In a probability distribution with fat tails (high kurtosis) the probability

Question 2 (10 Points): Explain why the following statements are true

Question 2 (10 Points): Explain why the following statements are true or false: a) In a probability distribution with fat tails (high kurtosis) the probability of extreme events is higher than in a distribution with lower kurtosis. b) Variance and standard deviation are the only way to measure the variability of a random variable. c) A risk averse person has a concave utility function d) The function U(X)=Rln(X) can be used to describe a utility function for the dollar value of X. e) The slope of the indifference curve of a risk averse investor decreases with increasing risk aversion

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