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This multiplicative version of the central limit theorem is sometimes called Gibrat's law. Whereas the central limit theorem for sums of random variables requires the condition of finite variance, the corresponding theorem for products requires the corresponding condition that the density function be square-integrable. [32]
For the purposes of control limit calculation, the sample means are assumed to be normally distributed, an assumption justified by the Central Limit Theorem. The X-bar chart is always used in conjunction with a variation chart such as the x ¯ {\displaystyle {\bar {x}}} and R chart or x ¯ {\displaystyle {\bar {x}}} and s chart .
Because of the continuity theorem, characteristic functions are used in the most frequently seen proof of the central limit theorem. The main technique involved in making calculations with a characteristic function is recognizing the function as the characteristic function of a particular distribution.
This section illustrates the central limit theorem via an example for which the computation can be done quickly by hand on paper, unlike the more computing-intensive example of the previous section. Sum of all permutations of length 1 selected from the set of integers 1, 2, 3
Galton box A Galton box demonstrated. The Galton board, also known as the Galton box or quincunx or bean machine (or incorrectly Dalton board), is a device invented by Francis Galton [1] to demonstrate the central limit theorem, in particular that with sufficient sample size the binomial distribution approximates a normal distribution.
Comparison of probability density functions, () for the sum of fair 6-sided dice to show their convergence to a normal distribution with increasing , in accordance to the central limit theorem. In the bottom-right graph, smoothed profiles of the previous graphs are rescaled, superimposed and compared with a normal distribution (black curve).
The central limit theorem gives only an asymptotic distribution. As an approximation for a finite number of observations, it provides a reasonable approximation only when close to the peak of the normal distribution; it requires a very large number of observations to stretch into the tails.
This theorem can be used to disprove the central limit theorem holds for by using proof by contradiction. This procedure involves proving that Lindeberg's condition fails for X k {\displaystyle X_{k}} .