Assignment
A normal distribution can be used to describe how sample characteristics or events relate to each other. The distribution can be "used to predict and adjust for a wide range of financial goals by optimizing financial decision-making by applying and graphically mapping financial data into a distribution set of variables" ("The use of normal distribution in finance", 2011). Under the normal distribution curve (bell curve), data is distributed around the mean or expected value. A low standard deviation indicates that the data points tend to be close to the mean of the data set, while a high standard deviation indicates that the data points are spread out over a wider range of values. Thus, determining if certain financial events are normally distributed can be useful because those events may be more likely to follow probabilistic patterns in the future.
Normal distributions can be used in finance to:
o Determine probability of financial events
o Compare financial events and/or products
o Assist in risk assessment
o Forecast return on investment (ROI)
o Present data in an easy-to-understand format
o Measure accuracy of statistical information through statistical analysis of the distribution
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.