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Exercise 3.3 (Normal kurtosis). The kurtosis of a random variable is defined to be the ratio of its fourth central moment to the square of its variance. For a normal random variable, the kurtosis is 3 . This fact was used to obtain (3.4.7). This exercise verifies this fact. Let $X$ be a normal random variable with mean $\mu$, so that $X-\mu$ has mean zero. Let the variance of $X$, which is also the variance of $X-\mu$, be $\sigma^2$. In (3.2.13), we computed the moment-generating function of $X-\mu$ to be $\varphi(u)=\mathbb{E} e^{u(X-\mu)}=e^{\frac{1}{2} u^2 \sigma^2}$, where $u$ is a real variable. Differentiating this function with respect to $u$, we obtain $$ \varphi^{\prime}(u)=\mathbb{E}\left[(X-\mu) e^{u(X-\mu)}\right]=\sigma^2 u e^{\frac{1}{2} \sigma^2 u^2} $$ and, in particular, $\varphi^{\prime}(0)=\mathbb{E}(X-\mu)=0$. Differentiating again, we obtain $$ \varphi^{\prime \prime}(u)=\mathbf{E}\left[(X-\mu)^2 e^{u(X-\mu)}\right]=\left(\sigma^2+\sigma^4 u^2\right) e^{\frac{1}{2} \sigma^2 u^2} $$ and, in particular, $\varphi^{\prime \prime}(0)=\mathbf{E}\left[(X-\mu)^2\right]=\sigma^2$. Differentiate two more times and obtain the normal kurtosis formula $\mathrm{E}\left[(X-\mu)^4\right]=3 \sigma^4$.

   Exercise 3.3 (Normal kurtosis). The kurtosis of a random variable is defined to be the ratio of its fourth central moment to the square of its variance. For a normal random variable, the kurtosis is 3 . This fact was used to obtain (3.4.7). This exercise verifies this fact.

Let $X$ be a normal random variable with mean $\mu$, so that $X-\mu$ has mean zero. Let the variance of $X$, which is also the variance of $X-\mu$, be $\sigma^2$. In (3.2.13), we computed the moment-generating function of $X-\mu$ to be $\varphi(u)=\mathbb{E} e^{u(X-\mu)}=e^{\frac{1}{2} u^2 \sigma^2}$, where $u$ is a real variable. Differentiating this function with respect to $u$, we obtain
$$
\varphi^{\prime}(u)=\mathbb{E}\left[(X-\mu) e^{u(X-\mu)}\right]=\sigma^2 u e^{\frac{1}{2} \sigma^2 u^2}
$$
and, in particular, $\varphi^{\prime}(0)=\mathbb{E}(X-\mu)=0$. Differentiating again, we obtain
$$
\varphi^{\prime \prime}(u)=\mathbf{E}\left[(X-\mu)^2 e^{u(X-\mu)}\right]=\left(\sigma^2+\sigma^4 u^2\right) e^{\frac{1}{2} \sigma^2 u^2}
$$
and, in particular, $\varphi^{\prime \prime}(0)=\mathbf{E}\left[(X-\mu)^2\right]=\sigma^2$. Differentiate two more times and obtain the normal kurtosis formula $\mathrm{E}\left[(X-\mu)^4\right]=3 \sigma^4$.

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Stochastic Calculus for Finance II : Continuous-Time Models
Stochastic Calculus for Finance II : Continuous-Time Models
Steven E. Shreve 1st Edition
Chapter 3, Problem 3 ↓

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Step 1: **Recall the moment-generating function (MGF) of \(X-\mu\)** Given that \(X\) is a normal random variable with mean \(\mu\) and variance \(\sigma^2\), the MGF of \(X-\mu\) is \(\varphi(u) = \mathbb{E}[e^{u(X-\mu)}] = e^{\frac{1}{2} u^2 \sigma^2}\).  Show more…

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Exercise 3.3 (Normal kurtosis). The kurtosis of a random variable is defined to be the ratio of its fourth central moment to the square of its variance. For a normal random variable, the kurtosis is 3 . This fact was used to obtain (3.4.7). This exercise verifies this fact. Let $X$ be a normal random variable with mean $\mu$, so that $X-\mu$ has mean zero. Let the variance of $X$, which is also the variance of $X-\mu$, be $\sigma^2$. In (3.2.13), we computed the moment-generating function of $X-\mu$ to be $\varphi(u)=\mathbb{E} e^{u(X-\mu)}=e^{\frac{1}{2} u^2 \sigma^2}$, where $u$ is a real variable. Differentiating this function with respect to $u$, we obtain $$ \varphi^{\prime}(u)=\mathbb{E}\left[(X-\mu) e^{u(X-\mu)}\right]=\sigma^2 u e^{\frac{1}{2} \sigma^2 u^2} $$ and, in particular, $\varphi^{\prime}(0)=\mathbb{E}(X-\mu)=0$. Differentiating again, we obtain $$ \varphi^{\prime \prime}(u)=\mathbf{E}\left[(X-\mu)^2 e^{u(X-\mu)}\right]=\left(\sigma^2+\sigma^4 u^2\right) e^{\frac{1}{2} \sigma^2 u^2} $$ and, in particular, $\varphi^{\prime \prime}(0)=\mathbf{E}\left[(X-\mu)^2\right]=\sigma^2$. Differentiate two more times and obtain the normal kurtosis formula $\mathrm{E}\left[(X-\mu)^4\right]=3 \sigma^4$.
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Key Concepts

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Central Moments
Central moments are the expected values of powers of deviations of a random variable from its mean. They provide insights into the shape of the distribution. The second central moment is the variance, and higher order central moments, such as the fourth moment, offer information about properties like the distribution's tails and peakedness.
Kurtosis
Kurtosis is a statistical measure that quantifies the 'tailedness' of a probability distribution. It is defined as the ratio of the fourth central moment to the square of the variance. For the normal distribution, the kurtosis is equal to 3, which serves as a benchmark for comparing kurtosis values of other distributions.
Normal Distribution
The normal distribution is a continuous probability distribution characterized by its bell-shaped curve, defined by its mean and variance. It is a fundamental distribution in probability theory and statistics, often used to model real-valued random variables whose distributions are not known.
Moment-Generating Function
The moment-generating function (MGF) is a tool used in probability theory to uniquely characterize the distribution of a random variable. By taking derivatives of the MGF, one can obtain all the moments of the distribution, thereby providing a method to compute measures like the mean, variance, and higher order moments.

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