The normal (or Gaussian or bell-shaped) distribution of probability specifies that probability follow the density f (x) = (1/Ïƒ '2p) exp[ - (x - Î¼)/2Ïƒ?] Where Ïƒ (sigma)?= the standard deviation, and Î¼ = the mean.
A continuous, symmetrical density function characterized by a bell-shaped curve, e.g., distribution of sampling averages.
A statistical distribution where observations are evenly distributed around the mean. OptionVue 5 uses a lognormal distribution. Studies have shown that stock prices are very close to being log normally distributed over time. When you choose bell curve as a price target in the program, a lognormal distribution based on price, volatility, and time until valuation date is constructed.