20.4 - Applications of Normal Distribution
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Practice Questions
Test your understanding with targeted questions
What is the empirical rule?
💡 Hint: Think about how data values spread around the mean.
Give an example of how normal distribution is applied in finance.
💡 Hint: Consider how investors evaluate market performance.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What percentage of data lies within two standard deviations from the mean according to the empirical rule?
💡 Hint: Recall the three key percentages defined by the empirical rule.
True or False: The normal distribution is used in quality control to determine acceptable product specifications.
💡 Hint: Think about how companies maintain quality standards.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A manufacturing company produces bolts with a mean diameter of 10mm and a standard deviation of 0.2mm. If the production output is normally distributed, what percentage of bolts will be within the range of 9.6mm to 10.4mm?
💡 Hint: Remember to convert the measurements to Z using the mean and standard deviation.
Discuss the limitations of assuming that stock returns follow a normal distribution in finance.
💡 Hint: Consider real market behaviors and their characteristics.
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