You are analyzing the summary statistics of the return distributions of two actively managed portfolios given below. Which portfolio is likely to have extreme negative outliers compared to a normal distribution?
Portfolio 1
Portfolio 2
Mean 2.46% 5.46%
Std Deviation 12.53% 4.66%
Skewness 2.31 -4.88
Exc. Kurtosis -8.45 6.34
Portfolio 2 is likely to have extreme negative outliers compared to a normal distribution. This can be inferred from the negative skewness and excess kurtosis values for Portfolio 2, indicating a distribution with a longer left tail and heavier tails compared to a normal distribution. This suggests that Portfolio 2 is more likely to have extreme negative returns compared to Portfolio 1.