The Gaussian model
Financial Analytics in Google Sheets
David Ardia
Professor in Quantitative Methods for Finance
The Gaussian model
Histogram of the standard Gaussian model
The Gaussian model
Theoretical probabilities
The Gaussian model
Density curve: Not a probability!
The Gaussian model
The Gaussian model
Function NORMDIST()
Function NORMDIST(): density curve
Function NORMDIST(): density curve
Function NORMDIST(): density curve
Function NORMDIST(): probability
Function NORMDIST(): probability
Function NORMDIST(): probability
Function NORMDIST(): probability
Function NORMDIST(): probability
Gaussian parameters
- Two parameters define the Gaussian model:
- The location $m$
- The dispersion $s$
Modifying the location
Change the location to the left:
- Set $m=-1$
Change the location to the right:
- Set $m=1$
Modifying the dispersion
Increase the dispersion:
- Set $s=1.5$
Decrease the dispersion:
- Set $s=0.5$
