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Bell-Shaped Curve

A bell curve, commonly known as the normal distribution, is a typical form of distribution for a variable. The phrase "bell curve" refers to the symmetrical bell-shaped curve that is used to show a normal distribution on a graph.

The most likely event in a series of data (its mean, mode, and median in this case) is represented by the highest point on the curve, or the top of the bell, while all other possible occurrences are symmetrically distributed around the mean, creating a downward-sloping curve on each side of the peak. The standard deviation describes the breadth of the bell curve.

Example of Bell curve

Blue-chip stocks with lower volatility and more predictable behavioral tendencies are more likely to exhibit a bell curve. The normal probability distribution of a stock's previous returns is used by investors to form assumptions about projected future returns.

The standard deviation, which is measured as the degree of variation of data in a sample around the mean, determines the breadth of a bell curve. If 100 test scores are gathered and utilized in a normal probability distribution, 68 percent of those test scores should lie within one standard deviation above or below the mean, according to the empirical rule. 95 percent of the 100 test scores should be included when moving two standard deviations away from the mean. Three standard deviations out of the mean should account for 99.7% of the results.