LOGNORMDIST

The LOGNORMDIST function calculates the probability density function of a log-normal distribution for a given value. It is useful in statistics and finance for modeling data that is skewed and follows a log-normal pattern.

Syntax

=LOGNORMDIST(x, mean, standard_dev)

x The value at which to evaluate the log-normal distribution.
mean The mean of the natural logarithm of the dataset.
standard_dev The standard deviation of the natural logarithm of the dataset.

About LOGNORMDIST

When dealing with data that exhibits a skewed and asymmetric pattern, the LOGNORMDIST function in Excel comes to the rescue. By analyzing a log-normal distribution, this function aids in understanding the likelihood of certain values occurring within the dataset. It is particularly beneficial for statistical analysis and financial modeling where data follows a log-normal distribution trend. On visualizing the log-normal curve, one can discern the probabilities associated with different data points and make informed decisions based on the distribution's characteristics.

Examples

Suppose you have a dataset with a mean of 2.5 and a standard deviation of 0.8. You want to find the probability density function at value 2.0. The LOGNORMDIST formula would be: =LOGNORMDIST(2.0, 2.5, 0.8) This will return the probability density at 2.0 for the given log-normal distribution parameters.

Consider a financial scenario where an investment follows a log-normal distribution with a mean of 6% and a standard deviation of 1.5%. You wish to calculate the likelihood of getting a return of 8%. The LOGNORMDIST formula would be: =LOGNORMDIST(8, 6, 1.5) This will provide the probability of achieving an 8% return based on the log-normal distribution parameters.

Questions

What does the LOGNORMDIST function output represent?

The output of the LOGNORMDIST function represents the probability density value at the specified input 'x' for the given log-normal distribution defined by the mean and standard deviation parameters.

In what scenarios is the LOGNORMDIST function commonly used?

The LOGNORMDIST function is frequently used in statistical analysis, financial modeling, risk assessment, and data analysis contexts where the data exhibits a log-normal distribution. It aids in determining the probability of certain values occurring within the dataset.

Can the LOGNORMDIST function be utilized for non-log-normal data?

The LOGNORMDIST function is specifically designed for log-normal distributions. It may not provide accurate results when applied to datasets that do not exhibit a log-normal pattern.

Related functions

NORM.DIST
NORM.INV
LOGNORM.INV
NORM.S.DIST
NORM.S.INV
NORM.DIST.RT