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In: Finance

What is a bell curve and normal score ?

What is a bell curve and normal score ?

Solutions

Expert Solution

Bell Curve:

A bell curve is the most common type of distribution for a variable and is thus considered to be a normal distribution. The graph used to depict a normal distribution consists of a bell-shaped line. The term bell curve is used to describe a graphical depiction of a normal probability distribution, whose underlying standard deviations from the median create the curved bell shaped. The center of curve contains the greatest number of a value and therefore would be the highest point on the arc of the line. This point is referred to the mean, but in simple terms it is the highest number of occurences of a element.

Normal Score:

Normal score relates to creating a single value which can be treated as if it had arisen from a standard normal deviation where the mean is zero. It is alternatively called as standard score or z score, where values are standardized by subtracting the sample or estimated mean and dividing by standard deviation. Particularly in applications, where the name normal score is used, there is usually a presumption that the value can be referred to a table of standard normal probabilities as a means of providing a significance test of some hypothesis, such as a difference in means.


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