Based on an examination of the QQ plot, which of the following statements is correct?
A. The returns are normally distributed.
B. The return distribution has thin tails relative to the normal distribution.
C. The return distribution is negatively skewed relative to the normal distribution.
D. The return distribution has fat tails relative to the normal distribution.
Answer:D
Based on an examination of the QQ plot, which of the following statements is correct?
A. The returns are normally distributed. B. The return distribution has thin tails relative to the normal distribution. C. The return distribution is negatively skewed relative to the normal distribution. D. The return distribution has fat tails relative to the normal distribution.
Explanation: This Q-Q plot has steeper slopes at the tails of the plot, which indicate fat tails in the