The computation of the first term on the right-hand side of (1) is<br>straightforward. The absolute value of (Pi,t Pt), however, does not<br>follow any known distribution for which exact formulas can be obtained.<br>Hence, we developed a method for calculating a normal distribution<br>approximation to the expectation, E[abs(Pi,t Pt)], for the<br>binomial distribution with Nit tosses (see Appendix A). As shown<br>in Venezia et al. (2010), this approximation is quite accurate even<br>for small numbers of Nit’s, and as Nit gets larger this approximation<br>becomes more accurate, according to the law of large numbers
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