A Note on the Ratio of Two Normally Distributed Variables

Jack Hayya, Donald Armstrong and Nicolas Gressis
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Jack Hayya: The Pennsylvania State University, University Park, Pennsylvania
Donald Armstrong: Bechtel Power Corporation, Houston, Texas
Nicolas Gressis: Indiana University, Bloomington, Indiana

Management Science, 1975, vol. 21, issue 11, 1338-1341

Abstract: This note is a continuation of a previous paper on normal approximations of standard forms. The standard form treated here is the ratio of two normally distributed variables. It is found that a suitable transformation of this ratio is approximately normally distributed provided that the coefficient of variation of the denominator is less than 0.39.

Date: 1975
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:21:y:1975:i:11:p:1338-1341

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