hedge fund utility function / statistics question
can someone explain, in a really dumbed down way, what "higher moments about the mean" means? what does "higher moments" mean?
i understand kurtosis and skewness but i dont understand what the phrases above are talking about....
Skewness and Kurtosis are the "higher moments" that you are rwferring to - the moments that non-normal distributions exhibit.
Skewness is referred to as the third moment, and Kurtosis is the fourth moment.
Double post.. my fault.
If you are looking for an explanation of "moments", I would check out wikipedia or something like that for that mathematical term.
variance/std dev is 2nd moment
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