The binomial theory of void fraction fluctuations is applied to the interpretation of neutron detector signals generated by density fluctuations of the coolant in nuclear reactors. Experiments are performed at the experimental setup for noise investigations on boiling effects (NIOBE) with the injection of nitrogen bubbles into a narrow coolant channel. NIOBE is a thermal-hydraulic loop located in the Higher Educational Reactor (Hoger Onderwijs Reactor) of the Interfaculty Reactor Institute, Delft, The Netherlands. The monitored two-phase-flow parameters include the size of bubbles and the density of bubble populations within the field of view of the neutron detectors, as well as local void fraction. Based on the experiments, a quantitative relationship is established between the parameters of two-phase flows and the measured neutron noise intensity. The validity of the results is not restricted to research reactor applications, and the conclusions can be used to monitor two-phase-flow coolant in power reactors as well.