Business application Z-scores
I have monthly cash flows from a business (values are positive and negative, with positive values indicating that the business gained money and vice versa) with a mean of -233698 and a SD of 3026624. I want to calculate the probability of cash flows in any given month being greater than +2000000 and less than -2000000. I'm assuming normality.
So, heres what I'm doing:
For the less than -2000000:
Integrating against a standard normal variable with bounds (-infinity to -.2531) I get a probability of .4001.
So, there is a 40% chance in any given month that cash flows will be less than -2000000.
Is this mathematically correct?
(pickslides thank you for helping out before)
Re: Business application Z-scores
You should say
Originally Posted by sfspitfire23