Excel Statistical Function NORMDIST Problem

[Rodby]

I put in the following:
X=-.055762
Mean=.005
SD=.04
Cumulative=FALSE =>means probability mass function, not cumulative
The result displayed is 3.14615427

The result makes no sense to me. Any result over one makes no sense to me.

What am I missing here?

 

[Jerry W. Lewis]

With continuous distributions (such as NORMDIST), cumulative=FALSE makes it a
probability density function NOT a probability mass function. The difference
is that with continuous distributions probability is given by the area under
the curve, not by the curve itself.

Since almost all of the probability of the normal distribution is between
mean+/-3*SD
it should be the case that
6*SD*NORMDIST(mean,mean,SD,FALSE)
should be much greater than one (draw the picture; this formula calculates
the area of a rectangle with the bell-shaped curve inscribed inside it --
specifically this formula should give 2.393653682).

If your expectation were correct that NORMDIST(,,,FALSE) should be bounded
by one, then this formula would imply that
NORMSDIST(3)-NORMDIST(-3) < 6*SD = 0.24
Since the probability of being more than 3*SD from the mean of the normal
distribution is about 0.003, not something much greater than 0.76, your
expectation must be wrong.

Jerry

 

[Paul Dunmore]

For the normal distribution, the largest possible value of the probability
density function is not 1, but 1/SQRT(2*PI())/SD; with your parameters, that
is about 9.97.