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115 CFA

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115.020.40.06 Reading 9 - 6. The Normal Distribution

# 6. The Normal Distribution

## j. explain the key properties of the normal distribution;

What is a normal distribution?

It is a symmetrical distribution with a bell curved shape.

How do the mean, median, and mode describe the normal distribution?

They are all the same.

What is a point estimate?

Sample mean and sample deviation are called point estimates.

What is a confidence interval?

Confidence intervals use point estimates to make probability statements about the dispersion of the outcomes of a normal distribution. A confidence interval specifies the percentage of all observations that fall in a particular interval.

What are the formulas for 90/95/99% confidence intervals?

- 90% $$-1.645 \sigma <= \bar{x} <= 1.645 \sigma$$

- 95% $$-1.96 \sigma <= \bar{x} <= 1.96 \sigma$$

- 99% $$-2.58 \sigma <= \bar{x} <= 2.58 \sigma$$

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