**Questions**

Non-normal distribution models are used more and more in order to price financial assets. We provide some basic questions and their respective answers on non-normal distributions:

** (1) What is the distribution skewness when you see more returns on the left of the mean?**

a) Skewness>0

b) Skewness<0

c) Skewness=0

**(2) What is the probability of having a return lower than -2.33 standard deviations?**

a) 5%

b) 2%

c) 1%

**(3) What is the kurtosis of a normal distribution ?**

a) 3

b) 0

c) -3

**(4) Which is the less dangerous for a risk averse investor?**

a) Positive skewness with kurtosis>3

b) Negative skewness with kurtosis>3

c) Negative skewness with kurtosis<3

**(5) Assume a normally distributed fund with an historical annualized return of 10% and an annualized volatility of 5%. How many years should you wait in order to have a monthly return of -5%?**

a) 37 years

b) 137 years

c) 3137 years

(6) Assume you invested in the 3 best S&P500 monthly returns and you have shorted the 3 worst S&P500 monthly returns, since 1990. What is this 6 dates cumulative return?

a) 50%

b) 98%

c) 198%

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