A stochastic dominance comparison of truncated normal distributions

A characterization of first and second order stochastic dominance rules is given for the comparison of two truncated normal distributions. Two types of truncation are considered: equal areas in each tail for both distributions or both distributions truncated at the same value on the left tail. A transformation of the normal distributions makes it possible to display the results graphically. The results can be used to compare the possible returns on investments with limited liability.