Howtosignalprocessing
- Is the difference between two normal distributions normal?
- How to calculate the difference between two normal distributions?
- Can normal distributions differ in their means?
- Are all normal distributions the same?
Is the difference between two normal distributions normal?
The idea is that, if the two random variables are normal, then their difference will also be normal.
How to calculate the difference between two normal distributions?
Difference D=X−Y is normal with μD=μX−μY and σ2D=σ2X+σ2Y.
Can normal distributions differ in their means?
Normal distributions can differ in their means and in their standard deviations.
Are all normal distributions the same?
Normal distributions are symmetrical, but not all symmetrical distributions are normal. Many naturally-occurring phenomena tend to approximate the normal distribution. In finance, most pricing distributions are not, however, perfectly normal.
