Why is Law of Large Numbers Important?
Law of large number is important because of following traits:
- Predictability: It helps in predicting the average outcome of random events over time.
- Reliability: It shows that the average of results from a large number of trials is reliable.
- Practical Use: It is widely used in statistics, economics, finance, and other fields to make informed decisions based on data.
Law of Large Numbers
Law of Large Numbers (LLN) is a mathematical theorem that states the average of the results obtained from many independent random samples.
In this article, we have discussed the Law of Large Numbers definition, its limitations, examples and others in detail.
Table of Content
- What is Law of Large Numbers?
- Limitation of Law of Large Numbers
- Types of Law of Large Numbers
- Why is Law of Large Numbers Important?
- Law of Large Numbers (LLN) and Central Limit Theorem (CLT)
- Examples of Law of Large Numbers
- Law of Large Numbers in Finance