Lognormal distribution

ankuragrawal.nit
Finance Junkie
Posts: 64
Joined: Sun Apr 01, 2012 10:52 am

Lognormal distribution

Postby ankuragrawal.nit » Tue Jan 10, 2012 1:10 am

We do understand from the graphs that lognormally distributed random variables are normally distributed on a logarithmic scale.

Now the question I have is whether the variable which is on the distribution on the log scale is called the lognormal variable or the variable on the normal scale is the lognormally distributed variable.

I know its a silly question to ask still its not clicking.

I believe that the variable on normal scale is lognormally distributed and the log of that variable which should no more be called a "lognormal variable" is normally distributed on a log scale.

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ankuragrawal.nit
Finance Junkie
Posts: 64
Joined: Sun Apr 01, 2012 10:52 am

Re: Lognormal distribution

Postby ankuragrawal.nit » Wed Jan 11, 2012 7:39 am

I interpreted it the wrong way then
I failed to realize that the shape of graph had changed for a log normal variable on a log scale to the shape resembling a normal distribution but it wsnt normal distribution actually.
The source is pristine's notes. They have shown a change in shape which I interpreted the wrong way.

Thanks!


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