Friday, February 28, 2014

PROBABILITIES functions in Excel-


Let X is random variable, x is a value of the random variable, and p be a probability. Then:
A probability such as Pr(X <= x) is given by the cumulative distribution function.
So the Excel command includes "DIST"
 TDIST for the T distribution
 NORMSDIST for the standard normal distribution (Mean =0, Stdev= 1)
NORMDIST for the normal distribution
A value of x such that Pr(X <= x) = p for some specified value of  p is called the inverse of the cumulative distribution function.
So the Excel command includes "INV"
TINV for the T distribution
NORMSINV for the standard normal distribution
NORMINV for the normal distribution.
t distribution is symmetric, bell-shaped, and centered at 0 just like the standard normal distribution, but are more spread out (higher variance).
As the degrees of freedom increases, the t distributions converge to the standard normal.
t distributions will be useful for statistical inference for one or more populations of quantitative variables.

Inputs – (X, Mean, Standard Deviation, Cumulative).
Cumulative- The argument indicates whether you want the cumulative probability. If you want the cumulative probability, use TRUE as the fourth argument. If you want the specific probability, use FALSE.

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