What role does the Central Limit Theorem play in evaluation of the confidence level or hypothesis testing?
When testing a statistical hypothesis or calculating a confidence interval, we generally take the mean of a certain number of samples from a population, and assume that this mean is a value from a normal distribution. The Central Limit Theorem tells us that this assumption is approximately correct, for large samples, and tells us the standard deviation to use.
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- What role does the Central Limit Theorem play in evaluation of the confidence level or hypothesis testing?
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