Discover what a log-normal distribution is, its financial applications, and how to calculate it, including using Excel for ...

6.2 The Normal Distribution (pp. 220-231) You are not required to memorize the formula for the normal probability density function, but rather know the properties (symmetry and bell shape).

Normal probability distribution is assumed in financial models; however, the returns of many securities tend to demonstrate a non-normal distribution.

Like Q-Q plots and probability plots, P-P plots can be used to determine how well a theoretical distribution models a data distribution. If the theoretical cdf reasonably models the ecdf in all ...