Richard Lockhart

  1. Methods to distinguish between polynomial and exponential tails.

    Authors: Joan del Castillo, Jalila Daoudi, Richard Lockhart
    Subjects: Methodology
    Abstract

    In this article two methods to distinguish between polynomial and exponential
    tails are introduced. The methods are mainly based on the properties of the
    residual coefficient of variation for the exponential and non-exponential
    distributions. A graphical method, called CV-plot, shows departures from
    exponentiality in the tails. It is, in fact, the empirical coefficient of
    variation of the conditional excedance over a threshold. The plot is applied to
    the daily log-returns of exchange rates of US dollar and Japan yen.

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