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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Normal distribution
in example 3 dealing with tables backwards how did you come to the conclusion that 95% is less than 10cm as opposed to it being above 10cm?
I have understood almost everything like how to we came to the answer, except that little bit. how do you know whether to add the z score to the mean or to subtract it?.
Best is to draw yourself a little sketch 🙂
The question asks for X where the probability of being more than X is 95%. Therefore X must be below the average of 10cms. We know that there is a 50% chance of being above the average of 10cms and therefore there must be a 45% chance of being between X and the average.
Since there is a 50% chance of being below the average there must be a 5% chance of being below X.
(Have you watched the lectures working through this chapter of the lecture notes?)