# About the number of independent forecasts in the Fundamental Law of Active Management

The original FLAM predicts the information ratio by

$$IR = IC \times \sqrt{N}$$ where $IR$ is the Information Ratio, $IC$ is the information Coefficient and $N$ is the number of independent forecasts. Later this law is improved several times, but the term $IC \times \sqrt{N}$ is always present. I don't seem to understand (and find a good practical example) of what is exactly $N$ and how to calculate it.

I would be grateful if someone explains the exact definition of $N$. What is an independent forecast? It may seem a stupid question to some, but for me it is fundamental.

In Zhou and Jain, Active Equity Management, it is written:

$N$ is the number of independent bets in a year, it has two aspects: the number of cross-sectional bets on different assets at any point in time and the number of independent bets on the same asset across time.

In this context what exactly is cross-sectional bet and independent bet on the same asset? It would be best if someone gives a small portfolio example.