28.3.3. Lognormal Distribution

Try these first

1. 1.

   What characterizes a lognormal distribution?

   Hint

   Consider how the logarithm relates to normality.

2. 2.

   Give an example where lognormal distribution can be applied.

   Hint

   Think of variables that cannot be negative.

3. 3.

   What is a defining characteristic of a lognormal distribution?

   • The mean is normally distributed
   • The natural log of the variable is normally distributed
   • It has negative values

   Hint

   Think about what makes lognormal unique.

4. 4.

   A lognormal distribution can take negative values.

   • True
   • False

   Hint

   Recall the definition.

5. 5.

   A company claims that their product's lifetime follows a lognormal distribution. The average lifetime of their products is 10 years, and the coefficient of variation is 0.4. What does this imply about the distribution?

   Hint

   Consider what a high coefficient of variation indicates.

6. 6.

   If you are given a dataset and want to test if it is lognormally distributed, explain the process you'd use.

   Hint

   Focus on statistical tests for normality.