Page 92 - FINAL CFA SLIDES DECEMBER 2018 DAY 3

LOS 10.l: Define the standard normal Session Unit 3:
distribution, explain how to standardize a 10. Common Probability Distributions
random variable, and calculate and

interpret probabilities using the standard
normal distribution. Calculating Probabilities Using z-Values, p. 229

Example: Using the z-table (2): Using the distribution of EPS with μ = $6 and σ = $2
again, what percent of the observed EPS values are likely to be less than $4.10?

P(EPS < $4.10).

That is, $4.10 is 0.95 SDs below the mean of
$6.00.

Step 2 –use table to find z:

F(Z) = (F–0.95) = 0.1711, or 17.11%.

And p that EPS will be more than $4.10?

Read from + z table or subtract from 1 to get
82.89%