A Note on the Ratio of Two Normally Distributed Variables

Published Online:https://doi.org/10.1287/mnsc.21.11.1338

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.

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