What is the significance of perplexity in evaluating LLMs?

Instruction: Discuss the concept of perplexity and its role in measuring the performance of LLMs.

Context: This question tests the candidate's understanding of how LLMs' performance is quantitatively assessed, focusing on a specific metric.

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The way I'd explain it in an interview is this: Perplexity measures how well a language model predicts a sequence, so it is useful as a training-time or modeling-quality signal. Lower perplexity generally means the model is assigning higher probability to the observed...

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