Skewness and Kurtosis Formulas


Should we know how to calculate skewness and kurtosis in a distribution. The formulas seem pretty long…

formulae - NO

meaning - YES

interpretation of a kurtosis or skewness number - YES

I will second this as well.

But the big picture behind is that a lot of financial theory is based on “normal distribution”, but in the real world, most data are not normally distributed, and that’s why quant spends a lot of time “normalizing” (or transforming, if you are mathematically inclined) the data.