Normal Distributions
Z-score is a statistical measurement that describes a value's relationship to the mean of a group of values (Investopedia, 2023).
Another relevant value is k, which represents the upper boundary of an interval.
Now, imagine P(-b < z < b) = 0.8516 on a normal distribution curve, with z at 0. The area under the curve between -b and b is 0.8516.
In terms of this curve, the k value would be b, with the interval being 0.8516 + whatever is to the left of this.
Let's determine k.
(Let's imagine our normal distribution curve again. 0.4258 is the area between 0 and b.)
Now, add 0.4258 + 0.5 to determine the area to the left of k.
What we have now is this:
- P(x < k) = 0.9258
- k = invnorm(0.9258, 0, 1)
- k = 1.445
Since k = b, b = 1.445.
Answer
b = 1.445