BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

First Semester 2020-2021, MATH F432 (Applied Statistical Methods)

Assignment
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Q. 1. One observed value of a binomial random variable X with p = 3
is x = 2. With this information,
find the maximum likelihood estimate for the parameter n.

Q. 2. Due to high volatility in financial stock market, Mr. Agrawal, an equity investor, is quite frustrated.
To fresh himself up, he often climbs a slippery pole. He found that he can climb to a height of at
least 1.850 m once in five attempts, and to a height of at least 1.700 m nine times out of ten attempts.
Assuming that the heights he can reach in various attempts form a normal distribution, calculate the
mean and standard deviation of the distribution. Calculate also the height that Mr. Agrawal can expect
to exceed once in one thousand attempts. Given that P (−0.8413 ≤ Z ≤ 0) = 0.30, P (0 ≤ Z ≤
1.2817) = 0.40, and P (Z ≤ −3.092) = 0.001.

Q. 3. A population X has E[X] = 0, E[X 2 ] = 1, and E[X 4 ] = 4. For a random sample of size 2, find the
standard error of S 2 .

Q. 4. Suppose the true average growth µ of one type of plant during a 1-year period is identical to that
of a second type, but the variance of growth for the first type is σ 2 , whereas for the second type,
the variance is 4σ 2 . Let X1 , X2 , ...Xm be m independent growth observations on the first type [so
E[Xi ] = µ, V [Xi ] = σ 2 ] and let Y1 , Y2 , ...Yn be n independent growth observations on the second
type [so E[Yi ] = µ, V [Yi ] = 4σ 2 ].

a. Show that for any δ between 0 to 1, the estimator µ̂ = δ X̄ + (1 − δ)Ȳ is unbiased for µ.

b. For fixed m and n, compute V (µ̂) and then find the vaule of δ that minimizes V (µ̂).

Q. 5. The mean squared error of an estimator θ̂ (of θ) is M SE(θ̂) = E[θ̂ − θ]2 . If θ̂ is unbiased, then
M SE(θ̂) = V (θ̂) but in general M SE(θ̂) = V (θ̂) + (bias)2 . Consider the estimator σ̂ 2 = KS 2 ,
where S 2 = sample variance. What value of K minimizes the mean squared error of this estimator
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when the population distribution is normal? [Hint: It can be shown that E((S 2 )2 ) = (n+1)σ
(n−1)
. In gen-
eral, it is difficult to find θ̂ to minimize M SE(θ̂), which is why we look only at unbiased estimators
and minimize V (θ̂).]
Using the observations 0.5, 1, −1.5, 2 from the standard normal distribution, find an unbiased esti-
mate, the maximum likelihood estimate and an estimate KS 2 for the value of K which minimizes the
mean squared error.

Q. 6. Let X1 , X2 , ...Xn be a random sample from a continuous probability distribution having median µ̃

a. Show that:
1
P [minXi < µ̃ < maxXi ] = 1 − ,
2n−1
1
so that (minXi , maxXi ) is a 100(1 − α)% confidence interval for µ̃ with α = 2n−1
.
 b. For each of six normal male infants, the amount of the amino acid alanine (mg/100 mL) was deter-
mined while the infants were on an isoleucine-free diet, resulting in the following data:

2.84 3.54 2.80 1.44 2.94 2.70

Compute a 97% CI for the true median amount of alanine for infants on such a diet.

c. Let X(2) denote the second smallest of the xi ’s and X(n−1) denote the second largest of the xi ’s. What
is the confidence coeffcient of the interval (X(2) , X(n−1) ) for µ̃?

Q. 7. Let X1 , X2 , ......, Xn be a random sample from a uniform distribution on the interval [0, θ], and let
U = 1θ maxXi .

a. Show that the rv U has density function

(
nxn−1 0≤x≤1
fU (x) =
0 otherwise.

b. Verify that
α α
P [( )1/n ≤ U ≤ (1 − )1/n ] = 1 − α,
2 2
and
P [α1/n ≤ U ≤ 1] = 1 − α.
Use these identities to obtain two 100(1 − α)% CI for θ.

c. If the waiting time for a bus during morning hours is uniformly distributed and observed waiting
times:
4.2 3.5 1.7 1.2 2.4.
Derive a 95% CI for θ by using both intervals. Which of these two CI should be preferred?