Discover normal distribution—a critical concept in finance—and its key properties, formula, and real-world applications. Learn how it impacts financial decision-making.

One of the most common applications where log-normal distributions are used in finance is in the analysis of stock prices. The potential returns of a stock can be graphed in a normal distribution.

In case you need to jog your memory however, a standard normal distribution, which is a normal distribution with the average at 0 and standard deviation as 1, is shown below. The term ‘bell curve’ ...

Victor Chew, Confidence, Prediction, and Tolerance Regions for the Multivariate Normal Distribution, Journal of the American Statistical Association, Vol. 61, No. 315 (Sep., 1966), pp. 605-617 Free ...