Applets are run inside browser’s JRE. Does this mean that you do not have to have JRE installed on your machine in order to run an applet?
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The “browser’s JVM” is the JRE that you have installed on your machine. Browsers don’t typically come with their own, they just use whatever you’ve got installed on your system already.
Perhaps you’ve confusing Java with JavaScript, which are actually totally unrelated to each other.