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Normal distribution definition

Many of us were introduced to it when we first heard 'you will be graded on a curve' and now we can grasp how universally important it is.

Beginner

Normal distribution is a probability distribution commonly used in Finance and other social sciences for statistical tests. There are several versions of the normal distribution, but the one called 'standard normal distribution' has a mean of 0 and standard deviation of 1 and is the default used to standardize data in spreadsheets and statistical analysis programming languages.

Synonyms: bell-shaped curve, Gaussian distribution, Gaussian function


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Quiz

Click box for answer.

The normal distribution is suitable for large and small sample sizes? | True or False

False. The t-distribution is better suited for small sample sizes.

In a Sentence

Bud:  Guy fails to realize that calling the normal distribution  Gaussian is off-putting.
Rex:  Yeah, classic Quant. Most I know are at least two standard deviations from normal.

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Keywords:
normal distribution
bell-shaped curve
Gaussian distribution
Gaussian function
probability distribution
stocks
standard normal
estimation
statistics