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**Unformatted text preview: **o Many variables in business are normally distributed o Location is determined by mean o Spread is determined by standard deviation o infinite range Standard normal distribution o Infinite family of curves o However, all normal distributions can be converted into a single distribution called the Z distribution o Process yields standardized normal distribution o Z score gives number of standard deviations a value X, is above or below the mean z = x − μ σ o normal table Calculating probabilities based on Normal Distributions o Finding values of z 4.6 Q1 o Consider an investment whose return is normally distributed with a mean of 10% and a standard deviation of 5% o What is the probability 0.0228 0.4772 0.9772 0.500 o P ( x is equal to or less than 0%) o Z = (0-0.1)/(0.05) = -2 o P ( Z equal to or less than -2) is equal to p( Z equal to or greater than 2) Midterm info LONG STATEMENTS BAYES RULE...

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- Fall '14
- IgnacioCastillo