Exercise

Which distribution?

It's often hard to initially select how to represent a loss distribution. A visual comparison between different fitted distributions is usually a good place to start.

The norm, skewnorm, t, and gaussian_kde distributions are available. Their fitted estimates of the available investment bank portfolio losses from 2007 - 2008 are displayed in the plt.figure(1) object, which you can show.

Create a new figure and plot a histogram of portfolio losses using plt.hist(losses, bins = 50, density = True). Using this histogram for comparison, which distribution(s) in plt.figure(1) fit losses best?

Instructions

50 XP

Possible Answers

Normal
Skewed Normal
T
Gaussian KDE
Both T and Gaussian KDE