E370

2/24/2016
Continuing Continuous
DistributionsThe
Standard Normal
Week 07, Part 4
A little review of linear transformations: If X is
continuous with a mean of x, and a standard

deviation of x, how is distributed?

What is the expected value of ?
( )( )
= =
( )

= = =

A linear transformation
 Whatis the standard deviation of ?
=SQRT(V(H))

= = ( ) =

+ =
+=
=

Transformation continued
 The most important member of the normal
family is X =Z ~ N(0,1),
the Standard Normal or the Z Distribution.
Any normal can be transformed into the
standard normal using the transformation
formula:

=

The Standard
 Its a way to compare one normal distribution
to another, in the same way the coefficient of
variation did for dispersion and the correlation
coefficient does for strength of a possible linear
relationship.
This is a way to compare an observation from
one distribution to an observation from
another.
It isnt unit free per se, but instead is a
transformation of a value into a measure of
distance from the mean. . .

Whats it good for?

. . . specifically, the number of standard
deviations from the mean.
A college basketball coach wants to recruit tall
players who will be able to handle the academic
demands of college. The criteria that are set are
that the player must be at least 74 inches tall and
have an IQ of at least 115. Height~N(70,2) and
IQ~N(100,12).
Of the criteria, which will be the hardest to
satisfy?

= =

= = .

For Example,
 XB~N(1.5, 0.1)
At the Bellagio, how many ounces of
distilled spirits would be in a drink with a Z-
score of 1.5?

.
. = = = . . + . =
.
.

At the Bellagio . . .
 XB~N(1.5, 0.1)
The Vegas Alcohol Commission will revoke the
liquor license for any establishment found to be
serving mixed drinks with more than 1.8
ounces of distilled spirits per drink.
Approximately, how likely is it that the Alcohol
Commission will have cause to revoke the
liquor license for the Bellagio?

..
. = = > . = . %
.
 =NORM.DIST(Z,0,1,1)=NORM.S.DIST(Z,1)

=NORM.INV(, 0, 1) = NORM.S.INV()

Some Excel Command Equivalents