Module 4 notes

Page 1

You can convert any normally distributed random variable to a standardized

normal random variable according to the formula

z = x-mean/SD

where

z = the standardized normal random variable indicating the number of standard

deviations x is from the mean (referred to as the z-value or z-score)

Examples 8.2 and 8.3 (pages 272-278) explain how to determine the area under

the curve associated with a given value of z. Table 8.1 on page 274 contains the

values of the cumulative standardized normal probabilities. You will also find

this table in Appendix B, Table 3, pages B-8 and B-9.

Sometimes you may be interested in determining the value of z for a given

probability. This is illustrated in Examples 8.4 and 8.5 (pages 279-280). Note

that if the normal probability table does not contain the exact value of the

probability you are looking for, you should use either the closest z-value or

take the mean between two z-values (as shown in Example 8.4).