In financial theory how financial data satisfied
In financial theory how financial data satisfied?
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Obviously, financial data may not satisfy all of these, or certainly, any. In exacting, it turns out that when you try to fit equity returns data with non-normal distributions you frequently get that the best distribution is one that has infinite variance. Not only does this complicate the good mathematics of normal distributions and the Central Limit Theorem, this also results in infinite volatility. It is appealing to those who want to give the best models of financial reality but does rather spoil several decades of financial theory and practice based upon volatility as a measure of risk, for illustration.
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