Risk aggregation and Extreme Events [76]

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Bullet points include: Used for analysing whether distribution of outcomes is ‘as expected’Asserting that something exhibits fat-tailed behaviour requires us to have some prior view about what it might otherwise ‘reasonably’ be expected to do E.g. is a 2 year old an ‘outlier’ because he/she is much shorter than the average of the general population? Not really, growing taller as you grow up a feature of the natural order With time series analysis such views are heavily influenced by time period for which data is available And therefore on our perception about whether there are secular trends at work

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