# What is inverse Gaussian distribution used for?

## What is inverse Gaussian distribution used for?

The Inverse Gaussian is a distribution seldom used in risk analysis. Its primary uses are: As a population distribution where a Lognormal distribution has too heavy a right tail. To model stock returns and interest rate processes (e.g. Madan (1998))

### What is the Norminv formula?

x = norminv( p ) returns the inverse of the standard normal cumulative distribution function (cdf), evaluated at the probability values in p . x = norminv( p , mu ) returns the inverse of the normal cdf with mean mu and the unit standard deviation, evaluated at the probability values in p .

What is Normsinv in Excel?

Definition of NORMSINV: A Microsoft Excel function that delivers the inverse of the cummulative standarized normal distribution. You enter the “probability that a value Z is up to…” and it returns that value Z (in terms of “sigmas”, because it is the standarized distribution with average 0 and sigma 1).

How do you find the inverse of a norm?

This is the inverse normal probability value. We can write this as P(X < a) = 0.023. This 0.023 probability is the area under the curve. In principle, we would integrate the normal curve from -∞ to a….Finding the Inverse

1. P = 0.0233 for Z = -1.99.
2. P = 0.0228 for Z = -2.00.
3. P = 0.0222 for Z = -2.01.