Question

# What is the law of large numbers as it relates to calculation of empirical probabilities?

What is the law of large numbers as it relates to calculation of empirical probabilities?

Solution:

Let us understand what theorotical probability and empirical probability is.

Theorotical probability, also known as priori probability, is the probability of an event before it takes place. It is calculated by the number of ways the particular event can occur divided by the total number of possible outcomes.

Empirical probability is the probability of the event after it has occurred. It is also known as experimental probability. It is calculated by number of times the event occurs divided by the total number of incidents observed.

Theoretical and empiricall probabilities are linked by the Law of Large Numbers. This law states that if an experiment is repeated numerous times, the relative frequency, or experimental probability, of an outcome will tend to be close to the theoretical probability of that outcome.

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