12.1 Normal Random Variable

A wide variety of numerical measurements produce bell-shaped histograms. For many of these, the mean and standard deviation provide all we need to compute probabilities. As an example, the histogram in Figure 12.2 shows prices of 97 one-carat diamonds of similar cut and clarity.

A histogram

Figure 12.2 Histogram of the prices of 97 one-carat diamonds.

Although all of these are one-carat diamonds, some cost considerably more than others. One of these diamonds costs about $2,000, whereas others cost more than $5,000. On average, these diamonds cost $4,066, but the large standard deviation ($738) ...

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