Q. What is the central limit theorem? Give two practical applications of this theorem.
Ans: The Central Limit Theorem states that distribution of sample approaches a normal distribution as the sample size gets larger irrespective of what is the shape of the population distribution. The Central Limit Theorem is a statistical theory stating that given a significantly large sample size from a population with finite variance, the mean of all samples from same set of population will be roughly equal to the mean of the population.
Some practical implementations of the Central Limit Theorem include:
1. Voting polls estimate the count of people who support a particular election candidate. The results of news channels that come with confidence intervals are all calculated using the Central Limit Theorem.
The Central Limit Theorem can also be used to calculate the mean family income for a specific region.