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A normal distribution can be used to approximate a binomial distribution when n* p and n * q are greater than 5.
What is a normal distribution?
A probability distribution that is symmetric about the mean is the normal distribution, sometimes referred to as the Gaussian distribution. It demonstrates that data that are close to the mean occur more frequently than data that are far from the mean.
A probability bell curve is more properly described as the normal distribution.
The mean and standard deviation of a normal distribution are 0 and 1, respectively. It has a kurtosis of 3 and zero skew.
Not all symmetrical distributions are normal, but all normal distributions are symmetrical.
Natural occurrences frequently resemble the usual distribution.
However, most price distributions in finance are not exactly normal distributions.
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