Normal distribution tables - part 1

In this lesson

1. 0:00 Understanding standard deviation and risk
2. 0:41 Normal distribution curve explained
3. 2:04 One standard deviation range and probability
4. 4:16 Two standard deviations from the mean
5. 6:00 Three standard deviations and outcome spread
6. 7:47 Analysing worst case scenarios
7. 10:00 Break even probability assessment

About this lesson

You'll discover how to use the standard deviation to calculate the probability of different profit scenarios—from best-case to worst-case—so you can make more confident decisions about project viability. The video walks through a practical investment example with an expected profit of £20 million and standard deviation of £10 million. You'll see how the normal distribution curve breaks down into ranges: one standard deviation either side captures 68.2% of possible outcomes, two standard deviations captures 95.4%, and three standard deviations captures 99.7%. This framework lets you quantify risk and answer real questions like "what's the probability we'll at least break even?" or "what's the chance profits will exceed £10 million?" By the end, you'll understand how to read and apply normal distribution tables to assess project risk—a core skill for investment appraisal in Performance Management and Financial Management papers. This foundation prepares you for more advanced probability analysis and decision-making under uncertainty in your CIMA or ACCA studies.

Duration: 11m