What does mesokurtic distribution indicate?

A mesokurtic distribution is characterized by its kurtosis value, which is exactly equal to that of a normal distribution. This implies that the distribution has tail thickness and peak sharpness similar to a normal distribution, indicating no excess kurtosis. In the context of financial distributions, this means that returns are normally distributed without extreme outliers or heavy tails that other distributions might exhibit.

This property of having no excess kurtosis is essential when evaluating risks and returns in investments, as it suggests a standard level of risk compared to normal distributions, making it a foundational concept in statistical analysis and financial modeling.

In contrast, other answer choices illustrate different statistical characteristics unrelated to mesokurtic distributions. For instance, a higher peak than normal indicates leptokurtic distribution, while a lower mean than median suggests a negatively skewed distribution. Constant returns over time refer to an entirely different concept not connected to the shape or characteristics of distribution tails or peaks.