What is the F Distribution Function?
The F.DIST function is categorized under Excel Statistical functions. It will calculate the probability density function or the Cumulative Distribution Function for the F Distribution. It measures the degree of diversity between two data sets.
For example, if we wish to find out the variability in the IQ scores of females vis-à-vis males, we can use the F.DIST function to examine it.
As a financial analyst, the function is useful in risk management. We can use it to understand and evaluate the extent of potential losses that a portfolio can suffer.
F Distribution Formula
The F.DIST function uses the following arguments:
- X (required argument) – This is the value at which we evaluate the function.
- Deg_freedom1 (required argument) – This is an integer specifying numerator degrees of freedom.
- Deg_freedom2 (required argument) – An integer specifying denominator degrees of freedom.
- Cumulative (required argument) – This is a logical value that determines the type of F distribution to be calculated. It can either be TRUE (uses the cumulative distributive function) or FALSE (uses the probability density function).
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How to use the F Distribution Function in Excel?
To understand the uses of the F.DIST function, let’s consider an example:
Suppose we are given the following data:
- Value at which we wish to evaluate the function: 14.569
- Numerator degree of freedom: 4
- Denominator degree of freedom: 2
To find out the F probability using the cumulative distribution function, which is the TRUE cumulative argument, we will use the following formula:
We get the result below:
To find out the F probability using the probability density function, which is the FALSE cumulative argument, we will use the following formula:
We get the result below:
Things to remember about the F.DIST Function
- If either deg_freedom1 or deg_freedom2 is a decimal number, it is truncated to integers by Excel.
- #NUM! error – Occurs if either:
- The value of x provided is less than 0.
- The argument deg_freedom1 or deg_freedom2 is less than 1.
- #VALUE! error – Occurs when any of the arguments provided is non-numeric.
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